Final Regulation

Thursday,
October 29, 2009

Part II

Department of
Education

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

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Federal Register / Vol. 74, No. 208 / Thursday, October 29, 2009 / Rules and Regulations

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

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AGENCY: Office of Postsecondary
Education, Department of Education.
ACTION: Final regulations.
SUMMARY: The Secretary amends 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) to
implement various general and non-loan
provisions of the Higher Education Act
of 1965 (HEA), as amended by the
Higher Education Opportunity Act of
2008 (HEOA) and other recently enacted
legislation.
DATES: Effective Date: These regulations
are effective July 1, 2010.
Implementation date: The Secretary
has determined, in accordance with
section 482(c)(2)(A) of the HEA, that
institutions may, at their discretion,
choose to implement the new and
amended provisions of §§ 600.32(d),
668.28, 668.23(d)(4), 668.43, 675.16,
675.18(g), 675.18(i), 686.41, and 686.42
on or after November 1, 2009. For
further information, see the section
entitled Implementation Date of These
Regulations in the SUPPLEMENTARY
INFORMATION section of this preamble.
FOR FURTHER INFORMATION CONTACT: For
general information or information
regarding these regulations 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:
[email protected] 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,

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Wendy Macias. Telephone: (202) 502–
7526 or via the Internet at:
[email protected].
For information related to all FWS
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 (TDD), 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.
On August
21, 2009, the Secretary published a
notice of proposed rulemaking (NPRM)
for general and non-loan programmatic
issues in the Federal Register (74 FR
42380).
In the preamble to the NPRM, the
Secretary discussed on pages 42383
through 42415 the major regulations
proposed in that document to
implement provisions of the HEOA,
including the following:
• Amending §§ 690.63(h), 690.64, and
690.67 to establish the conditions under
which students may receive up to two
Federal Pell Grant Scheduled Awards
during a single award year.
• Amending §§ 686.12(c), 686.41, and
686.42(c) to establish the extenuating
circumstances under which a TEACH
Grant recipient may be excused from
fulfilling all or part of his or her service
obligation.
• Amending § 675.18(g) to permit
institutions to use FWS funds to
compensate students employed in
projects that teach civics in school, raise
awareness of government functions or

SUPPLEMENTARY INFORMATION:

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resources, or increase civic
participation.
• Amending § 675.18 by adding
paragraph (i) to allow institutions
located in major disaster areas to make
FWS payments to disaster-affected
students.
• Amending §§ 675.41 and 675.43 to
revise definitions and terms relating to
work colleges.
• Adding § 668.28 to establish the
requirement that proprietary institutions
derive at least 10 percent of their
revenue from sources other than Title
IV, HEA program funds and specify how
institutions calculate the revenue
percentage.
• Amending § 668.41(a) and (d) and
§ 668.45 to expand 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; the placement
rate for any program offered by the
institution, if the institution calculates
this rate; and the completion and
graduation rate data that is
disaggregated by gender, race, and grant
or loan assistance.
• Amending § 668.41(e) to provide
that institutions that maintain oncampus housing facilities must publish
annually a fire safety report, maintain a
fire log, and report fire statistics to the
Department.
• Amending § 668.46 by adding
paragraph (h) to require 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.
• Amending § 668.46(c) to expand the
list of crimes that institutions must
include in the hate crimes statistics
reported to the Department.
• Amending § 668.46 by adding
paragraph (g) to require institutions to
include in their annual security report
a statement of emergency response and
evacuation procedures.
• Adding subpart O to 34 CFR part
668, to specify the conditions under
which students with intellectual
disabilities may receive Federal Pell
Grant, FWS, and FSEOG Program funds.
• Adding § 668.18 to establish
requirements under which an
institution must readmit
servicemembers to the same academic
status they had when they last attended
the institution.
• Amending § 600.32(d) to provide
that an institution that conducts a teachout at a site of a closed institution may,

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under certain conditions, establish that
site as an additional location.
• Amending § 600.5(a) and (e) to
include in the definition of ‘‘proprietary
institution of higher education’’ an
institution that provides 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.
• Amending § 668.14(b) to provide
that an institution must have developed
and implemented written plans to
effectively combat unauthorized
distribution of copyrighted material and
that the institution will offer
alternatives to illegal downloading or
peer-to-peer distribution of intellectual
property.
• Amending § 668.43(a) to include, as
part of the information an institution
must make available to prospective and
enrolled students, a description of any
plans the institution has to improve its
academic program.
• Amending § 692.10(b) to provide
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.
• Amending § 692.21(k) to provide
that the State program must 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.
• Adding subpart C to 34 CFR part
692 to establish 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.
Technical Amendments
In addition to the changes necessary
to implement provisions of the HEOA,
these final regulations also incorporate
technical amendments made to the HEA
by The Higher Education Technical
Corrections (Pub. L. 111–39), enacted on
July 1, 2009. These changes are as
follows: In § 690.75(e) we proposed that
a student whose parent was in the
Armed Forces and died in Iraq or
Afghanistan could receive the maximum
Federal Pell Grant eligibility if the
student was under 24 years old or
enrolled in an institution of higher
education at the time the parent died, in
accordance with section 401(f)(4) of the
HEA, as amended by the HEOA.

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However, Public Law 111–39 removed
section 401(f)(4) from the HEA and
added new sections 473(b) and 420R
effective July 1, 2009. Section 401(f)(4)
provided that, for purposes of Federal
Pell Grants only, a student was deemed
to have an expected family contribution
(EFC) of zero if the student’s parent was
in the Armed Forces and died in Iraq or
Afghanistan when the student was
under 24 years old or enrolled in an
institution of higher education at the
time the parent died.
Section 473(b) was added to Part F—
Need Analysis of the HEA and provides
that, beginning with the 2009–2010 and
succeeding award years, each student
with a Federal Pell Grant-eligible EFC
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, will be
determined to have an EFC of zero that
will generally apply to all Title IV, HEA
programs. Because part F of the HEA,
where these changes are reflected, is
subject to section 478(a) of the HEA,
which generally prohibits regulating the
requirements in part F, we are removing
proposed § 690.75(e).
Section 420R of the HEA establishes
a new, non-need-based program called
the Iraq and Afghanistan Service Grants
Program (IASG Program) starting in the
2010–2011 award year. To qualify for an
IASG, a student must have a parent or
guardian who died as a result of military
service in Iraq or Afghanistan after
September 11, 2001, and must be, at the
time of the parent or guardian’s death,
less than 24 years of age or enrolled at
an institution of higher education. A
qualifying student who is not eligible
for a Federal Pell Grant would be
eligible to receive an IASG that is the
same amount as a maximum Federal
Pell Grant to assist in paying the
student’s cost of attendance at an
institution of higher education. Grants
under the IASG Program may not
exceed the student’s cost of attendance,
and payments are adjusted like Federal
Pell Grants if the student is enrolled less
than full-time; unlike Federal Pell
Grants, IASG Program grants are not
considered to be estimated financial
assistance. Under this program, the
student’s EFC will not be changed as a
result of a parent or guardian’s service.
Regulations are necessary to implement
this Title IV, HEA program. However,
section 409 of Public Law 111–39
waives the provisions of sections 482
and 492 of the HEA concerning the
master calendar for regulatory effective
dates and the requirement to use
negotiated rulemaking to formulate
regulations for the IASG Program. We,

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therefore, expect to initiate the
regulatory process without negotiated
rulemaking and adopt the necessary
regulations that would be effective on
July 1, 2010, for the 2010–2011 award
year.
• Section 401(a)(6) of Public Law
111–39 also amended section
415E(b)(1)(B) of the HEA governing
allotments to States under the Grants for
Access and Persistence Program (GAP).
The allotment formula provides that a
State with a prior year allotment shall
receive not less than that amount in the
next year’s allotment. The HEA provides
that, if a State received an allotment for
2010–2011 under 34 CFR part 692,
subpart B, the Special Leveraging
Educational Assistance Partnership
Program (SLEAP), the State’s 2011–2012
allotment for the GAP Program shall not
be less than its 2010–2011 SLEAP
allotment. We are revising § 692.110(a)
to reflect this statutory change. We are
also revising appendix A to subpart C of
part 692 that provides a case study
illustrating the requirements for
allotting funds under the GAP Program
to reflect these changes to the
regulations.
We have also made a number of minor
technical corrections and conforming
changes. Changes that are statutory or
that involve only minor technical
corrections are generally not discussed
in the Analysis of Comments and
Changes section.
Waiver of Proposed Rulemaking for
Additional Conforming Changes
These final regulations incorporate a
statutory change made to the HEA by
the HEOA that was not included on
Team V’s negotiating agenda or in the
NPRM published on August 21, 2009.
However, this statutory change in
section 485(h) of the HEA is referenced
in § 602.24 of the Team III
(Accreditation) final regulations
published in the Federal Register as
Docket ID ED–2009–OPE–0009. We are
amending § 668.43(a) of these
regulations to reflect the statutory
provisions by adding new paragraph
(a)(11).
We are also amending § 690.6 by
adding paragraph (e) to reflect a
statutory change made by the HEOA to
section 401(c)(5) of the HEA. Section
690.6(e) provides that, if a student
receives a Federal Pell Grant for the first
time on or after July 1, 2008, the student
may receive no more than the
equivalent of nine Scheduled Awards.
Because these amendments
implement changes to the HEA that
were not negotiated, we do not discuss
them in the Analysis of Comments and
Changes section.

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Under the Administrative Procedure
Act (5 U.S.C. 553) (APA), the
Department is generally required to
publish a notice of proposed rulemaking
and provide the public with an
opportunity to comment on proposed
regulations prior to issuing final
regulations. In addition, all Department
regulations for programs authorized
under title IV of the HEA are subject to
the negotiated rulemaking requirements
of section 492 of the HEA. However,
both the APA and the HEA provide for
exemptions from these rulemaking
requirements. The APA provides that an
agency is not required to conduct
notice-and-comment rulemaking when
the agency for good cause finds that
notice and comment are impracticable,
unnecessary, or contrary to the public
interest. Similarly, section 492 of the
HEA provides that the Secretary is not
required to conduct negotiated
rulemaking for Title IV, HEA program
regulations if the Secretary determines
that applying that requirement is
impracticable, unnecessary, or contrary
to the public interest within the
meaning of the HEA.
Although the regulations
implementing the HEOA are subject to
the APA’s notice-and-comment and the
HEA’s negotiated rulemaking
requirements, the Secretary determined
that it was unnecessary to conduct
negotiated rulemaking or notice-andcomment rulemaking on the changes
needed in § 668.43. These changes
simply amend the Department’s
regulations to reflect statutory changes
made by the HEOA to paragraph (h) of
section 485 of the HEA, and these
changes are already effective. The
Secretary does not have discretion in
whether or how to implement these
changes. Accordingly, negotiated
rulemaking and notice-and-comment
rulemaking are unnecessary.
Implementation Date of These
Regulations
Section 482(c) of the HEA requires
that regulations affecting programs
under title IV of the HEA be published
in final form by November 1 prior to the
start of the award year (July 1) to which
they apply. However, that section also
permits the Secretary to designate any
regulation as one that an entity subject
to the regulation may choose to
implement earlier and the conditions
under which the entity may implement
the provisions early.
Consistent with the intent of this
regulatory effort to strengthen and
improve the administration of the Title
IV, HEA programs, the Secretary is
using the authority granted him under
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the following new and amended
provisions for early implementation, at
the discretion of each institution,
lender, guaranty agency, or servicer, as
appropriate:
• The closed school teach out
provisions in § 600.32(d).
• The readmission requirements for
returning servicemembers in § 668.18.
• The 90/10 revenue requirements in
§§ 668.28 and 668.23(d)(4).
• The institutional information
requirements in § 668.43.
• The FWS provisions in §§ 675.16,
675.18(g), and 675.18(i).
• The teach grant provisions
regarding extenuating circumstances in
§§ 686.12, 686.41, and 686.42.
In addition, the revisions to §§ 690.63,
690.64, and 690.67 of the Federal Pell
Grant Program regulations may apply to
the crossover payment period that is in
both the 2009–10 and 2010–11 award
years, i.e., a payment period that
includes June 30, 2010, and July 1,
2010. If an institution does not
implement these regulations prior to
July 1, 2010, but, prior to July 1, 2010,
designates a student’s 2010 crossover
payment period as being in the 2009–10
award year, the Secretary does not
consider these revisions to be applicable
to the crossover payment period.
Nothing will prevent the institution
from subsequently designating the 2010
payment period as being in the 2009–10
award year with the revisions to
§§ 690.63, 690.64, and 690.67 then being
applicable.
Analysis of Comments and Changes
Except as noted under Waiver of
Proposed Rulemaking for Additional
Conforming Changes, the regulations in
this document were developed through
the use of negotiated rulemaking.
Section 492 of the HEA requires that,
before publishing any proposed
regulations to implement programs
under title IV of the HEA, the Secretary
must obtain public involvement in the
development of the proposed
regulations. After obtaining advice and
recommendations, the Secretary must
conduct a negotiated rulemaking
process to develop the proposed
regulations. The negotiated rulemaking
committee did not reach consensus on
the proposed regulations that were
published on August 21, 2009. The
Secretary invited comments on the
proposed regulations by September 21,
2009. More than 113 parties submitted
comments, a number of which were
substantially similar. An analysis of the
comments and of the changes in the
regulations since publication of the
NPRM follows.

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We group major issues according to
subject, with appropriate sections of the
regulations referenced in parentheses.
We discuss other substantive issues
under the sections of the regulations to
which they pertain. Generally, we do
not address minor, non-substantive
changes, recommended changes that the
law does not authorize the Secretary to
make, or comments pertaining to
operational processes. We also do not
address comments pertaining to issues
that were not within the scope of the
NPRM.
Part 600 Institutional Eligibility Under
the Higher Education Act of 1965, as
Amended
Definition of Baccalaureate Liberal Arts
Programs Offered by Proprietary
Institutions (§ 600.5)
Comments: One commenter
supported the proposed change, stating
that it was a reasonable way to clarify
the term program leading to a
baccalaureate degree in liberal arts. One
commenter stated that the requirement
that an institution ‘‘has provided that
program since January 1, 2009’’ should
be interpreted to mean that any new
liberal arts program added from January
1, 2009, forward will qualify an
otherwise eligible institution as an
eligible proprietary institution, so long
as the institution has been accredited by
a recognized regional accrediting agency
or association since October 1, 2007, or
earlier.
Discussion: The Department does not
agree that the requirement that the
institution ‘‘has provided that program
since January 1, 2009’’ should be
interpreted to mean that any new liberal
arts program added from January 1,
2009, forward will qualify an otherwise
eligible institution as an eligible
proprietary institution. Rather, the
requirement means that an institution
was providing the program (i.e., was
enrolling students in the program) on
January 1, 2009, and has continued to
do so.
Changes: Section 600.5(a)(5)(i)(B)(1)
has been revised to clarify that an
institution meets the definition of a
proprietary institution of higher
education if, in addition to being
accredited by a recognized regional
accrediting agency or association
continuously since October 1, 2007, it
has provided a program leading to a
baccalaureate degree in liberal arts
continuously since January 1, 2009.

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Institutional Requirements for TeachOuts and Eligibility and Certification
Procedures (§§ 600.2, 600.32, 668.14)
Comments: Several commenters
supported the proposed changes. One
commenter stated that § 600.32(d)
should be expanded to provide that the
exemptions from the two-year in
existence requirement, the assumption
of liabilities, and the assumption of the
cohort default rate apply when an
institution conducts a teach-out at an
institution that closes because a
guaranty agency initiated an action to
limit, suspend, or terminate (LS&T) the
participation of an institution, or took
an emergency action against the
institution. One commenter explained
that a closing can be a very confusing
time for students if they were not given
accurate information about what was
happening at their institution, and
urged the Department to monitor closely
the process for establishing an
additional location under these
regulations. The commenter noted that
accurate and effective communication to
students is especially critical when the
teach-out institution is establishing a
permanent location at a closed
institution. The commenter asserted that
an institution establishing a permanent
location at the site of a closed
institution must be able to provide a
teach-out option that meets appropriate
quality standards even in cases when
the prior institution did not meet these
standards. The commenter stated that
the mere submission of a teach-out plan
should not be viewed as evidence that
these standards were met for purposes
of the closed school discharge.
Discussion: LS&T and emergency
actions initiated by a guaranty agency
against an institution are promptly
reported to the Department, and the
Department investigates those reports to
determine whether to initiate a separate
LS&T or emergency action against the
institution. Therefore, we do not believe
it is necessary to include as a trigger an
LS&T or emergency action initiated by
a guaranty agency that would provide
the two-year requirement, liability, and
default rate exemptions to an institution
conducting a teach-out at a closed
institution. Because of the interplay
between the actions taken by a guaranty
agency and the Department, there may
be some instances when an institution
may close prior to the Department
initiating an LS&T or emergency action.
In other instances, an institution may
close precipitously before the
Department has time to initiate an
appropriate action under the
circumstances. To address these
instances, the final regulations have

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been modified so that the action taken
by the Department may be initiated after
the institution closes. The Department
recognizes that a school closure and
teach-out can be a confusing time for
students, and intends to work closely
with the States and accrediting agencies
to make sure that students are given
accurate information about their options
during this transition. The opportunity
for another institution to perform the
teach-out, and open a permanent
location under this exemption, should
also ensure that the teach-out is
adequately staffed and designed to serve
the students that attended the closed
school.
Changes: Section 600.32(d)(1)(i) is
revised to clarify that 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 the
closed institution ceased operations
because the Secretary has taken an
LS&T or emergency action, regardless of
whether the Secretary took that action
before or after the institution closed.
Part 668 Student Assistance General
Provisions
Readmission Requirements for
Servicemembers (§ 668.18)
Comments: One commenter
supported the proposed regulations,
including the proposed requirement
limiting the institutional charges that an
institution may charge a returning
servicemember. Several commenters
opposed the proposed requirement
limiting the institutional charges that an
institution may charge a returning
servicemember because they stated it
would be administratively and
financially burdensome for institutions.
For the same reason, some of these
commenters also opposed the
requirement that an institution waive
charges for previously purchased
equipment for the first academic year in
which the servicemember returns if the
returning servicemember is readmitted
to the same program for the same
reason. Many of these commenters
asserted that, because many of the
affected servicemembers will receive
full tuition and fee benefits under the
Post-9/11 GI Bill, charging the returning
servicemember the current institutional
charges for a program, rather than the
same charges that the returning
servicemember was or would have been
assessed for the academic year during
which he or she left the institution, will
not penalize the student for having left
to serve in the uniform services. One
commenter added that this argument is
supplemented by the fact that at least
one State waives any tuition charges not

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paid by the GI Bill at public
universities. One of these commenters
stated that limiting charges to the first
year only would create an unrealistic
expectation for returning
servicemembers for the full cost of the
program. A few of the commenters
stated that limiting institutional charges
for returning servicemembers would be
unfair to other students at the
institution who would assume higher
costs, or noted that the proposed
requirement could preempt State
requirements.
Several commenters asserted that the
forced manual billing determinations
that the regulations would require of
institutions would be unduly
burdensome as the billing software used
by most institutions, which uses preprogrammed data, including current
year charges, does not accommodate
special case situations, such as the
proposed regulations would create.
Specifically, a few commenters noted
that institutions would be forced to
maintain multi-faceted data tables over
an undetermined number of years to
recreate the prior institutional charges
for servicemembers who may or may not
return, as institutions do not keep
student financial records for the entire
period covered by the readmission
requirements and billing systems are not
designed to archive the data necessary
to calculate institutional charges years
later. The commenters contended that,
even if an institution has all the
information necessary, recreating the
institutional charges would be
complicated as institutional charges
cover many types of charges involving
variations by program. One commenter
asserted that some Department of
Defense tuition assistance systems, such
as GoArmy, do not allow variations in
tuition rates and could potentially delay
tuition assistance processing for both
impacted and nonimpacted
servicemembers. A few commenters
stated that determining institutional
charges for returning servicemembers
who may have been admitted, but were
not enrolled or attending prior to
leaving to serve, would be particularly
difficult as they had never incurred
specific charges, with one of these
commenters noting that their institution
has an open admission policy resulting
in a large number of these students.
One commenter generally supported
the requirement limiting the
institutional charges that an institution
may charge a returning servicemember,
but stated that an institution should be
permitted to charge a returning
servicemember for new classes when a
program has changed, requiring the
servicemember to take additional

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classes in the form of prerequisites or
new requirements. A few commenters
noted that requiring an institution to
provide, if necessary, refresher courses
at no extra cost seemed to preclude an
institution from collecting funding from
other entities to cover those expenses.
One commenter stated that requiring an
institution to make reasonable efforts to
help the servicemember become
prepared to resume the program or to
enable the servicemember to complete
the program at no extra cost, would
impose an undue financial hardship and
administrative burden on the
institution. The commenter asserted
that, when there is only the normal
reasonable progression from one year to
the next, rather than any actual change
to the program in the servicemember’s
absence, it is the servicemember’s
responsibility to retain the knowledge
attained in the normal course of
educational progression. In addition, the
commenter stated that the definition of
‘‘reasonable efforts’’ is ambiguous and
would be difficult to determine.
Discussion: The Department believes
that the goal of these provisions is to
minimize the disruption to the lives of
persons performing service in the
uniformed services, allowing a
servicemember to return to an
institution without penalty for having
left because of that service. We believe
that limiting charges for the year in
which the servicemember returns to the
charges the servicemember was or
would have been assessed for the
academic year during which the
servicemember left is an important part
of this goal, and may necessitate
additional efforts by institution as well
as the absorption of some costs.
However, we agree that this goal would
still be achieved if any increase in
charges from the amount the
servicemember was or would have been
assessed for the academic year during
which the servicemember left the
institution is covered by veterans’ or
servicemember education benefits. In
addition, we believe that requiring
institutions to maintain only past
tuition and fee charges, rather than
requiring them to maintain all
institutional charges and waive charges
for new equipment required in lieu of
equipment previously paid for, will
accomplish this goal, while minimizing
burden to institutions that may have
had difficulty determining the previous
institutional charges beyond tuition and
fees, as well as difficulty determining
which of the current institutional
charges beyond tuition and fees would
be covered by veterans’ and
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Therefore, for a servicemember who is
readmitted to the same program, an
institution will be considered to have
admitted the servicemember with the
same academic status if, for the first
academic year in which the
servicemember returns, the institution
does not increase the tuition and fee
charges above the prior amount the
servicemember was or would have been
assessed for the academic year when the
servicemember left the institution,
unless there are sufficient veterans’
education benefits or other
servicemember education benefits to
pay the increased amount of those
tuition and fee charges. Consider, for
example, a servicemember who is
readmitted to the same program and was
assessed tuition and fee charges of
$5,000 for the academic year when the
servicemember left the institution. The
current tuition and fee charges for the
program are $7,000, a $2,000 increase
over the charges formerly assessed the
student. In addition to the original
$5,000 in charges, the institution may
charge the readmitted servicemember
for any portion of that $2,000 increase
that will be covered by veterans’
education benefits or other
servicemember education benefits. If
this student receives $1,000 in veterans’
education benefits or other
servicemember education benefits for
tuition and fees, the institution may
assess the student tuition and fee
charges of up to $6,000. If the student
receives $2,000 or more in veterans’
education benefits or other
servicemember education benefits for
tuition and fees, the institution may
assess up to $7,000, the tuition and fee
charges for other students admitted to
the program for the current academic
year. This approach will significantly
reduce the burden on institutions to
track many of the variable charges that
were included in the proposed
regulation, and will simplify the
determinations of what tuition or fee
amounts would be subject to the oneyear transition period for a returning
servicemember. The portion of tuition
and fees that are subject to this
temporary restriction may also be
reduced or eliminated by other policies
set by the institution, or under State
law, but the Federal requirement will
provide a consistent base line for all
institutions in every State and serve the
purpose intended by this provision in
the law.
We agree that students who are not
informed of any increase in tuition and
fee charges for subsequent years may
have unrealistic expectations of the total
cost of the program. We would expect

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that an institution would actively
inform affected servicemembers upon
readmission of any subsequent increase
and the total expected charges for the
program (an institution is required to
make this information available at all
times and include it in its annual
distribution of institutional and
financial information to all enrolled
students in accordance with § 668.41(c)
and (d)). To the extent that this
temporary restriction on the amount of
tuition and fees for returning
servicemembers is a benefit not
provided to the other students at an
institution, it is provided under the law
to ease the transition back to the
institution for the returning
servicemembers. We also believe that
this provision will not create conflicts
for benefits provided to other
servicemembers under the GoArmy
education program.
Although we appreciate that current
institutional billing software may not
easily accommodate affected
servicemembers, we believe that any
burden incurred by an institution that
must manually process such a student is
outweighed by the benefit to the
returning servicemember. We also
believe that limiting the covered costs to
tuition and fees significantly simplifies
this provision for institutions.
In accordance with § 668.18(a)(2)(iv),
an institution may not charge a
returning servicemember for additional
classes offered by the institution that are
prerequisites for the program. The
institution does not have to readmit
such a servicemember if the institution
can demonstrate that providing the
classes at no cost places an undue
hardship on the institution. If new
classes are required for the program and
those classes are taken by the
servicemember in the academic year in
which he or she returns, the institution
may not charge the additional tuition
and fees for those programs unless
doing so does not increase the tuition
and fee charges above the prior amount
the student was or would have been
assessed for the academic year when he
or she left the institution, or there are
sufficient veterans’ education benefits or
other servicemember education benefits
to pay the increased amount of those
tuition and fee charges. In requiring an
institution to provide, if necessary,
refresher courses at no extra cost, we
did not intend to preclude an institution
from collecting funding from other
assisting agencies to cover those
expenses. Also, we note that any
reasonable efforts an institution must
make to help the student become
prepared to resume the program, or to
enable the student to complete the

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program must be provided at no extra
cost to the student. We do not agree that
requiring an institution to make
reasonable efforts to help a
servicemember become prepared to
resume the program or to enable the
servicemember to complete the program
at no extra cost, would automatically
impose an undue financial hardship and
administrative burden on the
institution, nor do we agree that, in
cases where there is only the normal
reasonable progression from one year to
the next, rather than any actual change
to the program in the servicemember’s
absence, it is the servicemember’s
responsibility to retain the knowledge
attained in the normal course of
educational progression. Again, the goal
of these provisions is to minimize the
disruption to the lives of persons
performing service in the uniformed
services, allowing a servicemember to
return to an institution without penalty
for having left because of that service.
Holding a servicemember responsible
for retaining all knowledge attained
through previous attendance of the
program would be penalizing the
servicemember for having left to serve.
‘‘Reasonable efforts’’ are actions that do
not place an undue hardship on an
institution. An action places an undue
hardship on an institution if it requires
significant difficulty or expense to the
institution. The mere fact that the
readmission of a student will create
additional expenses or burden to the
institution is not enough for an
institution to deny a student
readmission. The expenses must be
significant when considered in light of
the overall financial resources of the
institution and the impact otherwise of
such action upon the operation of the
institution. An institution carries the
burden to prove by a preponderance of
the evidence that the expense or
difficulty of readmitting a student
would be significant.
Changes: Section 668.18(a)(2)(iii)(E) is
revised to provide that, for a
servicemember who is readmitted to the
same program, an institution will be
considered to have admitted the
servicemember with the same academic
status if, for the first academic year in
which he or she returns, the institution
does not increase the tuition and fee
charges above the prior amount the
student was or would have been
assessed for the academic year when the
student left the institution, unless there
are sufficient veterans’ education
benefits or other servicemember
education benefits to pay the increased
amount of those tuition and fee charges.
Proposed § 668.18(a)(2)(iii)(F), which

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would have required an institution to
waive charges for previously purchased
equipment, is removed. Section
668.18(a)(2)(iv)(A) has been revised: (1)
To make clear that any reasonable
efforts an institution must make to help
the servicemember become prepared to
resume the program, or to enable the
servicemember to complete the program
must be provided at no extra cost, and
(2) to make clear that those efforts must
be provided at no extra cost to the
student, to permit an institution to
collect from other entities for costs
associated with making such reasonable
efforts. The definition of undue
hardship in § 668.18(a)(2)(iv)(C)(2) is
amended to clarify that difficulty and
expenses must be significant when
considered in light of the overall
financial resources of the institution and
the impact otherwise of such action on
the operation of the institution.
Comments: One commenter asked
what would be required of an institution
to ‘‘promptly readmit’’ an affected
servicemember if the program to which
the servicemember was previously
admitted is offered infrequently, or is no
longer offered. One commenter asked
how long a servicemember may delay
readmission to an institution by
requesting to be readmitted at a later
date, and at what point the institutional
charges would be locked in. The
commenter also questioned whether the
unusual circumstances under which an
institution may admit a servicemember
at a date later than the next class or
classes in the program pertain to the
institution or just to the servicemember.
Discussion: If the program to which
the servicemember was previously
admitted is no longer offered,
§ 668.18(a)(2)(iii)(A) requires the
institution to admit the servicemember
to the program that is most similar to
that program, unless the student
requests or agrees to admission to a
different program. An institution
readmits a servicemember ‘‘promptly’’
if, in accordance with § 668.18(a)(2)(ii),
the institution readmits the
servicemember into the next class or
classes in the program beginning after
he or she provides notice of his or her
intent to re-enroll, unless the
servicemember requests a later date of
readmission or unusual circumstances
require the institution to admit the
servicemember at a later date.
These regulations presume that a
returning servicemember who provides
notice of his or her intent to reenroll at
an institution plans to do so soon after
providing such notice. The provision
that an institution must admit a
returning servicemember to the next
class or classes in the student’s program

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unless the student requests a later date
of admission was included to ensure
that an institution could not delay a
servicemember’s readmission until, for
example, the next semester if classes in
the student’s program were offered
during the upcoming semester.
However, the regulations do not
preclude the returning servicemember
from deciding that a later admission
date, such as the next semester, is
acceptable. No matter when the student
actually resumes his or her program, if
the returning servicemember is within
the window of eligibility in
§ 668.18(c)(iii), the requirements of this
section apply. Thus, for the first
academic year in which the
servicemember returns, the institution
cannot increase the tuition and fee
charges above the prior amount the
servicemember was or would have been
assessed for the academic year when the
servicemember left the institution,
unless there are sufficient veterans’
education benefits or other
servicemember education benefits to
pay the increased amount of those
tuition and fee charges. Unusual
circumstances under which an
institution may admit a servicemember
at a date later than the next class or
classes in the program may pertain to
the institution or to the servicemember.
There are a number of factors an
institution may consider when
determining whether unusual
circumstances require a later date of
readmission, such as the length of any
necessary retraining or intervening
changes in the circumstances of the
institution. State laws or requirements
(including any local law or ordinance)
or institutional requirements that
restrict enrollment, due to class size, for
example, or otherwise conflict with the
requirements of this section are not
‘‘unusual circumstances’’ as such laws
and requirements are superseded by the
requirements of this section for the
initial enrollment period. Institutions
should take reasonable steps to resolve
such restrictions as soon as possible to
come into compliance with those
provisions.
Changes: None.
Non-Title IV Revenue Requirement
Compliance Audits and Audited
Financial Statements (§ 668.23)
Comments: A few commenters asked
the Department to clarify the proposed
requirement in § 668.23(d)(4) under
which a proprietary institution must
disclose in a footnote to its audited
financial statements the 90/10 revenue
percentage and the components of that
percentage. The commenters suggested

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that the Department specify that the
reference in the regulations to Federal
revenue means Title IV, HEA revenue
and confirm their understanding that an
institution must disclose: (1) The dollar
amount of the numerator and
denominator of the 90/10 ratio; (2) the
dollar amount of the temporary relief
attributed to institutional loans under
the Net Present Value (NPV) calculation;
and (3) the amount of loan funds that
exceed the loan limits in effect before
ECALSA that are treated as non-Federal
revenue in the denominator of the 90/
10 ratio.
Discussion: Under proposed
§ 668.23(d)(4), a proprietary institution
would have to disclose, by source, the
amount of Federal and non-Federal
revenue the institution included in its
90/10 calculation. We are amending the
regulations to clarify that ‘‘source’’
means the individual categories of
revenues identified in Appendix C to
subpart B of part 668. To calculate its
90/10 percentage, an institution would
have to compile the information
detailed in Appendix C, particularly the
aggregated and adjusted amounts in
section 2. We therefore believe that it is
reasonable to require the institution to
disclose this information. Given the
added complexities that come from
these additional categories of revenue,
disclosing the institution’s calculation
will simplify the presentation in the
financial statements and facilitate the
review of that information by the
Department.
Changes: Section 668.23(d)(4) is
amended to provide that a proprietary
institution must disclose in a footnote to
its audited financial statements, the
dollar amount of the numerator and
denominator of its 90/10 ratio as well as
the individual revenue amounts
identified in section 2 of Appendix C to
part 668.
Revenue Generated From Programs and
Activities (§ 668.28)
Comments: One commenter asked the
Department to clarify whether the
revenue from students taking a course
offered by an institution as part of an
eligible Title IV, HEA educational
program counts for 90/10 purposes if
the students are taking the course to
prepare for an industry recognized
credential or to transfer to another
institution. For example, students that
are not enrolled in a Title IV, HEAeligible program take an Accounting 400
course, normally offered as part of a
Title IV, HEA-eligible accounting
program, as a refresher course to sit for
the Certified Public Accounting exam or
to transfer the credits from the course to
another institution.

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Discussion: An institution may count
the revenue described by the commenter
as long as the course or program is
offered for the purpose of preparing
students for taking an examination for
an industry recognized credential, or for
any other purpose described in
§ 668.28(a)(3)(iii) that would otherwise
qualify the revenue from that course or
program to be included in the 90/10
calculation. However, payments from a
student taking the class for transfer
credits would not count as revenue
because the student is not taking the
class for any of these purposes. An
institution should make sure that it
appropriately documents any revenue
the institution includes from these
classes in its 90/10 calculation.
Changes: None.
Revenue Generated From Institutional
Aid (§ 668.28)
Comments: A few commenters asked
the Department to clarify whether
installment sales contracts are
considered to be loans made to students
under § 668.28(a)(5)(i). Other
commenters noted that funds are not
advanced to a student under an
installment sales contract, and funds are
not paid in full to a student’s account.
Rather, an installment sales contract is
paid over time by the student to the
institution. As a result, the commenters
concluded that installment sales
contracts should not be treated as loans
under the NPV formula.
Some commenters asked for
clarification of the preamble discussion
(74 FR 42390) regarding the disposition
of third-party loans made to students
that are subsequently acquired by the
institution.
Other commenters urged the
Department to reconsider the provision
in § 668.28(a)(5)(iv) that a tuition
discount is a form of a scholarship that
must be disbursed from a restricted
account with funds from an outside
source. The commenters stated that
treating a tuition discount in this way is
inconsistent with the intent of the
HEOA and would encourage students to
incur more debt.
A few commenters asked the
Department to clarify that payments
made by students on financing
arrangements that do not qualify as
institutional loans count as cash
collected by the institution for 90/10
purposes.
Discussion: An installment sales
contract was included in the proposed
regulations because we believed that it
could be structured to satisfy all of the
conditions of an institutional loan that
were set forth in proposed
§ 668.28(a)(5)(i). However, although we

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noted in the preamble to the NPRM (74
FR 42389) that, to be included in the
NPV calculation, an installment sales
contract that would be classified as an
institutional loan would have to be
credited in full to the student’s account,
this condition was not included in the
proposed regulations. To address the
confusion reflected in the comments
over the qualifying conditions for
institutional loans, and the general
public view that a typical installment
sales contract does not provide for funds
to be credited to a student’s account, we
agree to remove installment sales
contracts from this section of the
regulations.
With regard to a loan made by a third
party to a student at an institution, in
the normal course, the proceeds of the
loan would be credited to the student’s
account, and the amount credited that
paid for tuition and fees not covered by
Title IV, HEA aid would count as nonTitle IV, HEA revenue in the 90/10
calculation. If the institution made the
same loan itself, it would only be
permitted to count the NPV of the loan
in the 90/10 calculation. In both cases
the institution has credited loan
proceeds of the same value to the
student’s account but the institution
would derive a greater benefit for 90/10
purposes from the loan that was made
by the third party. For example,
assuming the loan proceeds from a third
party pay $1,000 for tuition and fees not
covered by Title IV, HEA aid, the entire
$1,000 is counted as non-Federal
revenue for 90/10 purposes. If the
institution made the same loan, the
amount of funds counted as non-Federal
revenue would be less because of the
NPV calculation. For instance, if the
institution uses the simpler alternative
NPV approach, the amount of the nonFederal revenue would be $500 or 50%
of the loan. This different treatment of
the loan proceeds is based upon which
party is making the loan to the student
without transferring it afterwards to, or
from, the institution. These provisions
are not intended to permit an institution
to arrange with a third party to transfer
student loans after they are made in
order to distort the way the revenue
from those loans is treated under this
provision. To equalize the outcome
between an institution and a third party
making and purchasing a loan, an
institution that purchases a student loan
must treat it for 90/10 purposes as if the
institution made the loan itself.
Similarly, if an institution makes a
loan and transfers it to a third party, the
Department would not view that loan as
a loan that could be included in any
NPV calculation pursuant to section
487(d)(1)(d)(III) of the HEA. That section

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requires a loan that is included in the
NPV calculation to be subject to regular
loan repayment and collection. Any
institutional loan that is sold to a third
party within a year of when it was made
must be treated for 90/10 purposes as a
loan made by a third party. The amount
the institution may count as nonFederal revenue may not be more than
the amount paid to the institution for
that loan, less any amount the
institution agrees to pay the third party
if the loan goes into default or otherwise
triggers a contingent payment by the
institution. Consistent with the
Department’s current treatment of
recourse loans and the requirement to
use the cash basis of accounting, the
institution must adjust its 90/10 revenue
for any such payment on an
institutional loan in the fiscal year when
the payment is made.
We disagree with the commenters that
the proposed regulations regarding
tuition discounts are inconsistent with
the intent of the law. The regulations
simply reflect section 487(d)(1)(D)(iii) of
the HEA by specifying that an
institution may include scholarships as
revenue if the scholarships are
disbursed from an established restricted
account and that funds in that account
represent designated funds from an
outside source or from income earned
on those funds. That section of the HEA
states that scholarships may be provided
by an institution in the form of
monetary aid or tuition discounts.
With regard to financing arrangements
that are not loans, there is no change in
the Department’s policy that cash
payments made under those
arrangement count as non-Title IV, HEA
revenue for 90/10 purposes.
Changes: Section 668.28(a)(5)(i) is
revised to provide that, to be included
as an institutional loan for NPV
purposes, a loan made to a student must
be credited in full to the student’s
account.
Net Present Value (NPV)
Comments: Several commenters
objected to the provision in
§ 668.28(b)(2) that an institution may
not sell a loan it made to student until
the loan is in repayment for at least two
years. Although this provision would
apply only if an institution chose to use
the alternative approach to calculating
the NPV of its loans (using 50 percent
of loans made as the NPV), the
commenters argued that holding the
loans for at least two years is contrary
to both statutory intent and institutional
mission. The commenters reasoned that
in response to the loss of availability of
private student loans, the NPV approach
provided by the HEOA is intended to

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give an immediate benefit to an
institution that had to fill a funding gap
itself by making loans to its students. To
the second point, the commenters stated
that the primary mission of an
institution is to provide education and
training, not to become a lender or
remain in the lending business.
Other commenters agreed with the
rationale for the two-year ban on selling
loans, but argued that the two-year
period was too long and would unfairly
impact an institution that provided loan
funds to students who are not ‘‘high
risk’’ and whose loans would perform
within commercially acceptable norms.
To mitigate this impact, the commenters
recommended reducing the ban to one
year.
One commenter questioned whether
the proposed regulations ensure that the
calculation of the NPV for institutional
loans takes into account the possibility
that institutions do not intend to collect
the loans they make to students. The
commenter asserted that this practice
calls into question an institution’s
willingness or ability to accurately
report estimates of annual payments
due, as well as annual payments
collected on these loans. The
commenter also asked whether
institutional loans that default are
properly accounted for 90/10 purposes
and if the Department has the authority
to require, or would require, an
institution to disclose information about
its loan defaults.
Discussion: As stated in the NPRM (74
FR 42391), we proposed the alternative
approach for calculating the NPV as an
administrative convenience for an
institution that either prefers a simpler
method to determine the NPV or does
not need the additional non-Federal
revenues that might be counted if the
NPV formula is used. It is solely up to
the institution whether to use this
alternative method or the actual NPV
calculation. Each approach has costs
and benefits that must be weighed by
the institution. If the institution believes
the alternative approach is too
restrictive or somehow not in keeping
with its mission, it should use the NPV
calculation.
With regard to the comments about an
institution’s unwillingness to collect the
loans it makes, we note that the
institution might benefit initially from
the NPV calculation, but because its
collection rate would decrease
significantly if it continues this practice,
the institution would derive no benefit
from future NPV calculations. We also
note that the two-year ban on selling
institutional loans, which applies to
institutions that choose to use the
alternate NPV approach, is necessary to

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ensure that the Department and other
oversight entities have sufficient time to
monitor whether the loans are subjected
to routine collection efforts.
Changes: None.
Revenue From Loan Funds (§ 668.28)
Comments: A few commenters noted
that, although the proposed regulations
in § 668.28(a)(6) provide that an
institution may count as non-Title IV,
HEA revenue the amount of a loan
disbursement for a payment period that
exceeds the amount a student would
have received before the enactment of
ECALSA, the regulations did not
address how an institution should treat
the excess loan funds when a student
withdraws during a payment period.
The commenters suggested that the
excess loan funds should be returned in
proportion to the overall loan
disbursement for the payment period.
Another commenter requested that
when a student takes sequential courses
within a non-term program, and is
charged on a course-by-course basis, the
excess loan funds should be attributed
within a payment period on a course-bycourse basis. In this case, several
courses make up the payment period.
Discussion: When some of a student’s
loan funds are classified as funds in
excess of loan limits existing prior to
ECASLA, those excess loan amounts are
included as revenue from a source other
than Title IV, HEA program funds under
§ 668.28(a)(6) if those excess amounts
pay for institutional charges remaining
on the student’s account after Title IV,
HEA funds are applied. The
determination of which loan funds are
classified as ‘‘post-ECASLA’’ funds, i.e.,
are funds in excess of loan limits
existing prior to ECASLA, is generally
made on a payment period basis. That
is, if a student’s loan for the loan period
contains a post-ECASLA amount and
the post-ECASLA amount is 1⁄3 of the
total loan amount, then each payment
period’s loan disbursement is generally
considered to consist of 1⁄3 postECASLA loan funds and 2⁄3 pre-ECASLA
loan funds. However, if a student takes
sequential courses within a non-term
program where several courses make up
a payment period, and the student is
charged on a course-by-course basis,
then the determination of which loan
funds are classified as post-ECASLA
funds may be determined on a courseby-course basis. Under
§ 668.28(a)(7)(iv), loan funds that are
returned pursuant to § 668.22 when a
student withdraws from school are
excluded from school revenues. The
Secretary intends that, when a school
determines the amount of loan funds
that are excluded from revenues under

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§ 668.28(a)(7)(iv), it considers the
returned loan funds to be pre-ECASLA
loan amounts and post-ECASLA loan
amounts based on the ratio that existed
for those categories of funds in the
student’s loan for the loan period.
Changes: Section 668.28(a)(7)(iv) is
amended to provide that, in determining
the amount of loan funds that are
excluded from 90/10 revenues under
§ 668.28(a)(7)(iv) when a student
withdraws pursuant to § 668.22, and the
institution returns loan funds from a
loan disbursement considered to consist
of pre-ECASLA loan funds and loan
funds that were in excess of loan limits
existing prior to ECASLA, the funds that
the institution returns are pre-ECASLA
loan amounts and post-ECASLA loan
amounts based on the proportion of
those loan amounts that existed in the
loan disbursement used in the Return
calculation. For example, a student’s
loan disbursement for a payment period
is $3,000, and $1,000 represents the
funds in excess of loan limits existing
prior to ECASLA. The proportional
breakdown of the funds returned under
the Return calculation is two-thirds preECALSA loan funds and one-third postECASLA loan funds.
Application of Funds (§ 668.28)
Comments: A few commenters noted
that the proposed regulations did not
address how military education benefits
are treated for 90/10 purposes. The
commenters argued that because
students have earned these benefits
through employment in difficult and
often dangerous conditions, and are free
to use the benefits at an eligible
institution, the benefits should be
treated for 90/10 purposes as earned
employment benefits. However, a
student receiving these benefits, which
are essentially restricted to pay for
tuition and fees, may also be fully
eligible for Title IV, HEA aid.
Consequently, the commenters asked
the Department to revise the regulations
to provide that military education
benefits overcome the presumption that
Title IV, HEA funds are used first to pay
for tuition and fees.
Discussion: Section 487(d)(1)(C) of the
HEA contains the list of funds or
sources of aid that overcome the
presumption that Title IV, HEA funds
are used first to pay for tuition and fees.
The Department does not have the
authority to expand that list.
Changes: None.
Notification to the Department
(§ 668.28)
Comments: Several commenters
objected to the proposal in § 668.28(c)(3)
that an institution must notify the

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Department that it failed the 90/10
requirement no later than 45 days after
the end of its fiscal year. Some of the
commenters stated that there was no
reason to shorten the current 90-day
notification period. Other commenters
argued that because the penalty for
failing 90/10 (especially for a second
consecutive year) is so severe, an
institution should not be required to
report unaudited data. According to the
commenters, this may result because the
small number of independent auditors
who are experts in 90/10 calculations
may be unavailable to the large
percentage of for-profit institutions that
have fiscal years ending December 31,
because this is time that the auditors
would normally be busy doing audit
and tax work.
Discussion: We are not persuaded that
an institution that knows it is close to
failing the 90/10 requirement could not
plan for or take the steps necessary to
engage an audit firm in time to meet the
45-day reporting deadline.
Changes: None.
Institutional Plans for Improving the
Academic Program (§ 668.43(a))
Comments: A few commenters stated
that the requirement in the proposed
regulations that an institution make
readily available to enrolled and
prospective students any plans by the
institution for improving the academic
program of the institution should
include the statement in the preamble of
the NPRM that an institution is allowed
to determine what a ‘‘plan’’ is, including
when a plan becomes a plan.
Discussion: We agree that including
the concept that an institution has the
discretion to determine when a plan
exists would clarify the intent of the
regulations.
Changes: Section 668.43(a)(5)(iv) is
amended to clarify that an institution
must make readily available to students
any plans by the institution for
improving the academic program of the
institution, upon a determination by the
institution that such a plan exists.
Peer-to-Peer File Sharing and
Copyrighted Material (§§ 668.14(b)(30)
and 668.43(a)(10))
Comments: A few commenters
supported the proposed changes
asserting that they represented a fair
interpretation of the intent of the statute
and would aid institutions in both
interpreting and properly following the
new statute. One commenter asked
whether the requirement that an
institution offer, to the extent
practicable, legal alternatives to illegal
downloading or otherwise acquiring
copyrighted material could be satisfied

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by the institution simply not blocking
legal alternatives. One commenter
expressed concern that the requirement
that, as a part of an institution’s plans
for combating the unauthorized
distribution of copyrighted material, the
institution must include the use of one
or more technology-based deterrents as
well as procedures for periodically
reviewing the effectiveness of the plans
would be unduly financially and
administratively burdensome for
institutions.
Discussion: We do not believe that
simply not blocking legal alternatives
for downloading or otherwise acquiring
copyrighted material qualifies as
‘‘offering’’ legal alternatives. The
requirements of § 668.14(b)(30)(ii)(A)
and (B), that an institution must
periodically review the legal
alternatives and make available the
results of the review to its students
through a Web site or other means,
support the notion that an institution’s
actions in this area must be active,
rather than passive. We note, however,
that an institution must offer such legal
alternatives ‘‘to the extent practicable.’’
Thus, how or whether the institution
offers such alternatives is controlled by
the extent to which it is practicable for
the institution to do so. As stated in the
preamble to the NPRM (74 FR 42393),
the Department anticipates that
individual institutions, national
associations, and commercial entities
will develop and maintain up-to-date
lists of legal alternatives to illegal
downloading that may be referenced for
compliance with this provision.
The requirement that, as a part of an
institution’s plans for combating the
unauthorized distribution of
copyrighted material, the institution
must include the use of one or more
technology-based deterrents is statutory
(see section 485(a)(1)(P) of the HEA) and
we do not have the authority to remove
this requirement. Moreover, we believe
that the requirement that an institution’s
plans include procedures for
periodically reviewing the effectiveness
of the institution’s plans for combating
the unauthorized distribution of
copyrighted material is essential for
institutions to comply with the
requirements in section 485(a)(1)(P) and
487(a)(29) of the HEA.
Changes: None.
Consumer Information (§§ 668.41 and
668.45)
Comment: One commenter suggested
that we remove the definition of
‘‘Retention rate’’ from the regulations in
§ 668.41. The commenter stated that it is
unnecessary because the regulations
already instruct institutions to disclose

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retention rates as they are reported to
the Integrated Postsecondary Education
Data System (IPEDS) and IPEDS
provides the definition on its Web site
for institutions when they report that
information. Of greater importance is
the fact that, if the National Center for
Education Statistics decides to modify
the definition in the future, it would be
better for them not to be constrained by
having the current definition codified in
the regulations.
Discussion: We agree.
Changes: We have removed the
definition of ‘‘Retention rate’’ from the
regulations.
Comments: Although some
commenters agreed with some or all of
the proposed regulations addressing
consumer information disclosures, a
number of them objected to the
proposed provision in § 668.41(d)(5)(iii)
that would require an institution to
disclose any placement rates it
calculates, noting that, regarding
placement, the statute only requires
disclosure of information, not an actual
rate. The statute addresses the
requirement to report information about
the ‘‘placement in employment of, and
types of employment obtained by,
graduates of the institution’s degree or
certificate programs.’’ Because the
statute specifically uses the term ‘‘rates’’
when it addresses graduation,
completion, and retention, but not when
it addresses placement, the commenters
stated that the reporting of a ‘‘rate’’ for
placement information exceeds the
scope of the statute.
For similar reasons, some of the
commenters objected to the requirement
to report the methodology that the
institution uses in determining
placement information, because a
methodology would appear to be
applicable only to an officially
calculated rate. Further, some
commenters noted that, although
institutions may calculate various
placement rates for their own purposes,
those rates are not necessarily intended
to be disclosed to the public. One
commenter added that requiring
institutions to report placement rate
data that they voluntarily produce for
their own purposes (such as for internal
assessment of their programs) would be
a disincentive to the institution to
engage in that activity.
This commenter did, however,
support the concept of requiring an
institution to make available to students
any placement data that are used in
advertising, marketing, or recruitment.
Noting that some rates might be
calculated on individual programs or
other subcategories of the institution,
several commenters suggested that the

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requirement to report placement rates
that the institution voluntarily
calculates should only be applicable to
institution-wide placement rates. One
commenter noted that reporting
placement rates for individual programs
is not required by the statute, cannot
reasonably be implemented, and is
unnecessary. The commenter
specifically noted that current
regulations addressing an institution’s
requirement to have a program
participation agreement require an
institution that advertises job placement
rates as a means of attracting students to
provide information about its
employment and graduation statistics.
A number of commenters stated that
the reporting of actual placement rates
would be excessively burdensome for
institutions and that the burden would
outweigh the value of this reporting. A
couple of commenters expressed
concern that the regulations would force
colleges to obtain information from
graduates that the graduates are not
obligated to provide, resulting in biased
responses that would ‘‘taint’’ the
information made available to students.
On the other hand, a couple of other
commenters stated that ‘‘when an
institution has calculated placement
rates, suggesting that it wants to know
whether, when, and where its graduates
are employed, then it is reasonable to
think that the subject is of interest and
value to students and prospective
students as well, and should be shared
with them.’’ Finally, although these
same two commenters supported
removing the words ‘‘upon request’’
from the several places in the
regulations where institutions are
required to make certain information
available to students and prospective
students, another commenter stated that
the Department should not delete those
words when describing the institution’s
responsibility to make job placement
information available to its consumers.
The commenters who supported
removing those words stated that
removing them would make it clearer
that the consumer information in
question must be easily available.
However, the commenter who opposed
removing those words stated that,
because the words were in the HEA, the
Department did not have the authority
to exclude them from the regulatory
language implementing that part of the
HEA.
Discussion: The Department believes
that, in addressing information
dissemination activities, congressional
intent was that students and prospective
students be provided pertinent
information related to an institution’s
completion, graduation, transfer-out,

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and placement record. Only when
sufficient information is available in
these areas can students and prospective
students make informed choices about
the institution. The statute allows
institutions to use placement
information that the institution obtains
from sources such as alumni and
student satisfaction surveys, and it does
not mandate that institutions calculate
an actual rate for this purpose. However,
when an institution has voluntarily
calculated a placement rate, regardless
of whether it is an institution-wide
placement rate or a placement rate of
only one or more programs or other
subcategories of the institution, and
regardless of whether the institution
advertises its job placement rates, we
believe that it is consistent with
congressional intent to have the
institution disclose this information to
its consumers. Thus, although the
regulations do not mandate that the
institution calculate a placement rate,
when the institution has voluntarily
chosen to do so, the regulations require
it to provide that information to its
students and prospective students. To
help ensure that the information is as
meaningful as possible, the regulations
require that the institution disclose not
only the source of the information
provided, but the time frames and
methodology associated with the
calculation or production of the
information.
Finally, regarding the exclusion of
‘‘upon request’’ when describing the
institution’s responsibility to make job
placement information available to its
students and prospective students, the
Department notes that institutions
typically compile and make the
information available on their Web sites,
but possibly in paper form as well.
Consequently, we view the inclusion of
the phrase ‘‘upon request’’ to mean that
this information is readily available to
students who wish to see it. As a matter
of course, students coming to an
institution’s Web site to learn about the
institution should be able to find this
information, and students inquiring
directly may be referred to the Web site
or provided with the information on
paper.
Changes: None.
Comment: With regard to the
disaggregation of completion or
graduation rates by receipt or non
receipt of certain types of aid, one
commenter expressed concern that the
wording in § 668.45(a)(6)(ii), which
states that ‘‘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,’’ would exclude students

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who received aid for the first term (the
period in question), but who had the
receipt of that aid delayed beyond the
period in question due to an
unanticipated deferral of payment, such
as for verification. The commenter
stated that receipt of aid in this
circumstance would have the same
effect on access and enrollment as if the
aid were paid in the first term. The
commenter expressed hope that the
Department’s intent was not to have the
students listed as not receiving the aid
in question.
Discussion: We agree that students
who receive aid in a second term that
was intended for the first term should
be listed in the same category as
students who actually received their aid
in the first term.
Changes: We have changed the word
‘‘in’’ to ‘‘for’’ in § 668.45(a)(6)(ii).
Comment: Several commenters
expressed concern that recordkeeping
and reporting requirements in § 668.45
could serve as a disincentive to
institutions to offer a comprehensive
transition and postsecondary education
program (as addressed in subpart O of
the regulations, Financial Assistance for
Students with Intellectual Disabilities).
The commenters questioned whether
these students would negatively affect
an institution’s completion or
graduation rate because students with
intellectual disabilities do not typically
matriculate and graduate with a regular
diploma.
Discussion: Section 668.45 requires an
institution to prepare a completion or
graduation rate (and sometimes a
transfer out rate) for its certificate- or
degree-seeking, first-time, full-time
undergraduate students. If an institution
has a comprehensive transition and
postsecondary education program, some
of its students with intellectual
disabilities who are enrolled in that
program may factor into the institution’s
completion and graduation rate. It is
unlikely that they would be part of an
institution’s transfer out rate. A
comprehensive transition and
postsecondary education program may
be a degree or certificate program, or it
may be a non-degree or non-certificate
program. Certificate or degree-seeking,
first-time, full-time undergraduate
students with intellectual disabilities
who are enrolled in a comprehensive
transition and postsecondary education
program will be part of an institution’s
completion and graduation rate
calculations. As with other students, if
they complete or graduate from their
degree or certificate program within the
time frames listed in § 668.45(b), they
will be listed. The Department does not
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undergraduate students with
intellectual disabilities who are enrolled
in a comprehensive transition and
postsecondary education program
designed to lead to a degree or
certificate will necessarily have
completion or graduation rates
significantly different from first-time,
full-time, undergraduate students
without intellectual disabilities.
Students with intellectual disabilities
who are enrolled in a comprehensive
transition and postsecondary education
program that does not lead to a degree
or certificate will not be a factor in an
institution’s graduation and completion
rate.
Changes: None.
Comments: Two commenters noted
that removing the reference to paragraph
(d) in § 668.48(b) leaves out the
exclusion of students who have 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 from the
completion or graduation, or transferout rate information required by
§ 668.48.
Discussion: The commenters are
correct. The proposal to remove the
reference to paragraph (d) and replace it
with paragraph (e) was a mistake.
Changes: None.
Campus Safety Provisions
Reporting and Disclosure of Information
(§ 668.41(a))
Comment: One commenter requested
clarification of what would be
considered an ‘‘on-campus student
housing facility.’’ Specifically, the
commenter questioned how this
definition should be applied in cases in
which there are public-private
partnerships or third parties who may
own or control property on areas
contiguous to the campus or on
university-owned property.
Discussion: The Department
recognizes that there are a myriad of
possible arrangements that an
institution may have for housing
facilities for students. Regarding
whether a particular student housing
facility is an ‘‘on-campus’’ facility, we
refer to the current definition of the
term ‘‘campus’’ in § 668.46(a). To
clarify, any student housing facility that
is owned or controlled by the
institution, or is located on property
that is owned or controlled by the
institution, and is within the reasonably
contiguous geographic area that makes
up the campus is considered an oncampus student housing facility.
Changes: None.

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Missing Student Notification Procedures
(§ 668.46(h))
Comment: A number of commenters
requested clarification of how the
proposed requirement in § 668.46(h)
relates to requirements under the
Family Educational Rights and Privacy
Act (FERPA). Under this section,
institutions must provide students
living in an on-campus student housing
facility an option to register a
confidential contact person to be
notified in the case that the student is
determined missing.
Discussion: Although missing student
contact information would be
considered part of a student’s education
records under FERPA, section 485(j) of
the HEA, as amended by section 488(g)
of the HEOA, requires that students be
provided the option to register
‘‘confidential’’ contact information. This
indicates that a student’s contact
information should receive greater
privacy protections than FERPA
provides. Under section 485(j) of the
HEA, only authorized campus officials
and law enforcement officers in
furtherance of a missing person
investigation may have access to this
confidential contact information. We
view a student’s identification of a
contact person pursuant to section
485(j) of the HEA and § 668.46(h) as
providing permission for law
enforcement personnel to contact the
identified individual under the
circumstances identified in these
statutory and regulatory provisions.
Changes: None.
Comment: Some commenters
expressed concern that the proposed
notification procedures in § 668.46(h)(2)
may lead to unnecessary alarm on the
part of parents, guardians, and
emergency contact persons, as well as a
needless burden on campus and local
law enforcement agencies. Specifically,
they requested clarification that the
notification procedures would only take
effect if, after a brief investigation, the
missing student report is found to be
valid. In addition, several commenters
requested clarification about the 24 hour
time period requirements associated
with the notification procedures,
suggesting that an institution’s policy
statement must explicitly state that the
institution must make the notification
within 24 hours after an official
determination has been made that the
student has been missing for 24 hours.
Discussion: The proposed regulations
in § 668.46(h)(2) specify that an
institution’s notification procedures
must go into effect within 24 hours after
a student has been officially determined
to have been missing for 24 hours by the

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campus security department or local
law enforcement agency, as applicable.
This does not preclude an institution
from either making a determination that
a student is missing before the student
has been missing for a full 24 hours or
initiating notification procedures as
soon as it determines that the student is
missing. A brief investigation as
suggested by the commenter would
presumably be included in this official
determination, e.g., authorities could
check sources such as Facebook in
trying to determine whether the student
is missing. We agree, nevertheless, that
the regulations could be clearer in
delineating the 24 hour time periods.
Changes: Section 668.46(h) is revised
to clarify the time frame within which
notification must occur.
Comment: A commenter stated that
the regulations in § 668.46 were unclear
and suggested a new structure.
Discussion: We reviewed the
commenter’s suggested language, but we
continue to believe the current structure
is sufficiently clear. This language
reflects the tentative agreement reached
by the Team V committee during
negotiated rulemaking, and the
Department wishes to preserve this
agreement.
Changes: None.
Annual Fire Safety Report—Definitions
of Terms (§ 668.49(a))
Comment: One commenter suggested
that the definition of value of property
damage should be revised to include
only the damage to property,
furnishings, and equipment that is
owned, leased, or otherwise controlled
by the institution. The commenter
argued that it could be burdensome for
institutions to determine the value of
property and contents that are owned by
third parties and that this information
could be deemed private by the other
party. In addition, the commenter
suggested that institutions should have
the option to provide explanatory text
and clarifying information for estimates
of property damage. The concern was
that a high dollar value may create false
concern as to the safety on campus,
when in reality, a high value could be
from damage to a single piece of
expensive equipment.
Discussion: The definition of the
value of property damage applies to an
on-campus student housing facility and
includes the value of property and the
contents within. The Department
recognizes that many of the contents on
a property may be owned by third
parties. However, because the statute
requires that information be provided
about damage caused by fires in oncampus student housing facilities, this

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estimate should include the value of
property that is not owned or controlled
by the institution. Although an
institution may not be able to determine
the exact value of the contents, it must
give the most accurate estimate possible
in order to be in compliance with the
regulation. With regard to explanatory
text, institutions have the flexibility to
include additional information in the
annual fire safety report. In reporting
statistics to the Department, the Webbased collection tool will include space
for institutions to include explanatory
text for each item that will be viewable
on the public Web site.
Changes: None.
Comment: One commenter stated that
the definition of fire in § 668.49(a) was
ambiguous and needed to be clarified.
Specifically, the commenter suggested
that phrases such as ‘‘open flame or
other burning in a place not intended to
contain the burning or in an
uncontrolled manner’’ and ‘‘place’’
could be interpreted differently by
institutions and, therefore, could
undermine the consistency of the
definition of ‘‘fire’’ for statistical and
comparative purposes. Further, the
commenter suggested an alternate
definition drawn from insurance law
that would include the concept of a
‘‘hostile fire,’’ or one that includes any
combustion that cannot be controlled,
escapes from where it was initially set
and confined, and that was not intended
to exist. The commenter also questioned
the feasibility of gathering statistics on
each instance of a fire that does not
result in injury, death, or property
damage, suggesting that reports of
insignificant fires will obscure attention
to serious fire problems or trends.
Discussion: Section 485(i)(1)(A) of the
HEA requires that institutions collect
and report statistics on the number of
fires in each on-campus student housing
facility, and section 485(i)(3) of the HEA
further requires that institutions
maintain a log of all fires that occur in
any on-campus student housing facility.
The Department and non-Federal
negotiators worked diligently to define
the term fire, understanding that it is
difficult to devise a definition that will
cover all of the fires that we intend to
be included yet still exclude the ones
that we do not. The negotiators reached
a tentative agreement on the definition
of fire, and the Department wishes to
preserve this language. We continue to
believe that the definition set forth in
the proposed regulations can reasonably
be interpreted and applied by
institutions.
In addition, under the HEA all fires
will be included in the institution’s
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the definition of fire arguably may not
be limited to only fires that result in
injury, death, or property damage.
Further, as stated in the preamble to the
NPRM, an institution’s policies
regarding fire safety do not affect the
classification of whether a fire meets the
definition of fire. As an example, one
commenter suggested that a candle wick
might be a ‘‘place’’ that is intended to
contain burning, but that student
residence hall policies might prohibit
candles, rendering the candle wick no
longer a ‘‘place’’ intended to contain a
flame because the candle should not be
there at all. However, a candle wick is
still a place intended to contain
burning, regardless of whether candles
are prohibited under an institution’s
policies. The Department anticipates
including additional examples in a
revised version of the Handbook for
Campus Crime Reporting to provide
guidance to institutions in complying
with these regulations.
Changes: None.
Annual Fire Safety Report—Statistics
(§ 668.49(b) and (c))
Comment: One commenter suggested
that an institution should not be
responsible for tracking an individual
with a fire-related injury who has
separated from the university for the
purpose of potentially including that
individual in the institution’s statistics
on fire-related deaths. If that individual
dies within one year of sustaining
injuries as a result of a fire, then the
institution may not know whether that
individual died as a result of those
injuries.
Discussion: The regulations do not
require an institution to track an
individual that separates from, and is no
longer in contact with, the institution.
However, the institution is expected to
make a reasonable effort to ascertain
whether an individual’s death is
considered a fire-related death, as
defined in § 668.49(a). For example, if
an individual with fire-related injuries
is hospitalized a few miles from the
institution, the institution may
reasonably be expected to track this
person for potential inclusion in the
institution’s statistics. By contrast, if an
individual separates from the institution
and travels to another country, the
institution may not be expected to track
them for inclusion in the institution’s
statistics.
Changes: None.
Annual Fire Safety Report—Description
of Policies (§ 668.49(b))
Comment: One commenter suggested
that we revise the language related to
the reporting of fire statistics under

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proposed § 668.49 to specify that these
statistics include fires that are reported
to a ‘‘campus fire authority.’’
Discussion: Institutions are expected
to collect information about, and report
on, all fires regardless of whether they
were reported to a campus fire
authority. Fires may be reported to a
variety of authorities at an institution
other than a campus fire authority (e.g.,
to a residence life officer). The intent of
the regulations is to include these fires
in an institution’s statistics and fire log.
Changes: None.
Comment: Two commenters suggested
that the Department require that
institutions have fire doors and other
doors in the path of exit from a fire
inspected at least annually and disclose
in their annual fire safety report how
often the doors are inspected. The
commenters noted that proper
maintenance and inspection of every
fire safety system element is critical to
ensure that these elements can function
in the case of a fire.
Discussion: We define a fire safety
system in § 668.49(a) as ‘‘any
mechanism or system related to the
detection of a fire, the warning resulting
from a fire, or the control of a fire,’’
listing elements including, among
others, sprinkler systems, fire detection
devices, stand-alone smoke alarms, and
fire doors and walls as examples of what
might be included in a fire safety
system. The commenter correctly states
that maintenance and inspection of a
fire safety system can help ensure that
the elements are properly functioning.
Institutions are required to describe the
fire safety system in each on-campus
student housing facility, and an
institution may provide information
about how often the elements of each
fire safety system are inspected or
maintained in this description. The
Department expects that an institution
will adequately maintain the elements
of its fire safety systems. However, we
do not intend to specify a maintenance
or inspection schedule for each of these
elements.
Changes: None.
Annual Fire Safety Report—General
(§ 668.49)
Comment: One commenter suggested
a number of minor changes to a variety
of provisions, including:
• Replacing the phrase ‘‘may
include’’ in the definition of a firerelated injury in § 668.49(a) with the
word ‘‘includes’’;
• Replacing the words ‘‘faculty, staff’’
in the definition of a fire-related injury
in § 668.49(a) and in the requirement
that an institution include policies
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training programs in its annual fire
safety report in § 668.49(b)(6) with the
word ‘‘employees’’;
• Replacing the words ‘‘resulting
from’’ in the definition of a fire-safety
system in § 668.49(a) with ‘‘of’’;
• Replacing the phrase ‘‘smoke,
water, and overhaul’’ in the definition of
value of property damage in § 668.49(a)
with ‘‘smoke and water’’; and
• Revising the § 668.49(c)(1)(ii) to
read ‘‘The number of persons who
received fire-related injuries that
resulted in treatment at a medical
facility, including at an on-campus
health center.’’
Discussion: We agree to make some of
these changes. In particular, we agree
with the commenter that institutions
should include the number of persons
who received fire-related injuries, as
opposed to the actual number of
injuries, as a single person may have
more than one injury. We also agree that
the term ‘‘employees’’ is more precise
than the words ‘‘faculty, staff’’ and have
revised the regulations accordingly.
Changes: We have revised the
language in § 668.49(c)(1)(ii) to clarify
that the number of injuries refers to the
number of people with fire-related
injuries. We have also replaced the
words ‘‘faculty, staff’’ with the word
‘‘employees’’ in both § 668.49(a) and
§ 668.49(b)(6).
Comment: One commenter suggested
that we revise § 668.43 to include two
additional disclosures specified in the
HEOA that require institutions to
disclose their policies on vaccination,
and information on diversity of the
student body.
Discussion: The Department is not
addressing all of the self-implementing
provisions of the HEOA in these
regulations. We intend to publish
separate regulations covering these new
disclosures.
Changes: None.
Subpart O—Financial Assistance for
Students With Intellectual Disabilities
Scope and Purpose (§ 668.230)
Comment: One commenter expressed
concern that the limit on the amount of
time for which a student can receive a
Pell Grant would adversely affect the
completion time of a student with an
intellectual disability because the
student may need to spend additional
time in remedial or developmental
classes. The commenter suggested that
the Department waive the cap on the
number of Federal Pell Grant awards a
student with an intellectual disability
may receive.
Discussion: The Federal Pell Grant
statutory cap is 18 semesters or 9 years.

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Because students with intellectual
disabilities are not yet enrolled in
comprehensive transition and
postsecondary programs approved by
the Department under these regulations,
we do not have any data that suggests
that these students will need longer to
complete their comprehensive transition
and postsecondary programs. For this
reason, we believe it is inappropriate to
waive the Federal Pell Grant cap for
these students as part of these
regulations.
Changes: None.
Comment: Two commenters requested
that proposed § 668.230 be revised to
require the Secretary to waive any rules
necessary to ensure that students
enrolled in eligible comprehensive
transition and postsecondary programs
remain eligible for Federal Pell, FSEOG,
and FWS program funds.
Discussion: Section 484(s)(3) of the
HEA authorizes the Secretary to waive
any statutory provision applicable to the
Federal Pell Grant, FSEOG, and FWS
programs—other than the need analysis
provisions in part F of the HEA—as well
as any institutional eligibility provisions
that the Secretary determines necessary
to ensure that programs enrolling
students with intellectual disabilities
otherwise determined to be eligible may
receive financial assistance. While this
section of the HEA authorizes the
Secretary to grant the waivers of the sort
described by the commenters, it does
not require the Secretary to do so. The
Secretary generally does not regulate the
Department’s own procedures.
Changes: None.
Definitions (§ 668.231)
Comment: A few commenters
expressed concern that the proposed
regulations do not sufficiently convey
the importance of employment as a
desired outcome for students with
intellectual disabilities who enroll in
eligible comprehensive transition and
postsecondary programs.
Discussion: We agree with the
commenters that gainful employment is
an important outcome for students with
intellectual disabilities participating in
comprehensive transition and
postsecondary programs. In fact, the
Department has a long history of
providing national leadership for, and
administration of, programs that
develop and implement comprehensive
and coordinated programs of vocational
rehabilitation, supported employment
and independent living for individuals
with disabilities, through services,
training and economic opportunities, in
order to maximize their employability,
independence and integration into the
workplace and the community.

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We believe that the regulations
sufficiently ensure that the
comprehensive transition and
postsecondary programs approved by
the Department will focus on ensuring
that enrolled students will be prepared
for gainful employment. Specifically, in
the definition of the term
comprehensive transition and
postsecondary program in § 668.231,
paragraph (a)(3) provides that the
program is one that 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.
Under § 668.232(a), an institution
applying to offer a comprehensive
transition and postsecondary program as
an eligible program under title IV of the
HEA must provide to the Secretary a
detailed description of that program,
including a description that addresses
all of the components of the program, as
defined in § 668.231. Because
§ 668.231(a)(3) specifically references
that a comprehensive transition and
postsecondary program is one that is
designed to prepare enrolled students
for gainful employment, the detailed
description required under § 668.232(a)
must include a description of how the
program meets this definitional
requirement. We, therefore, believe that
the regulations sufficiently ensure that
any comprehensive transition and
postsecondary program will focus on
the outcome of gainful employment for
students participating in these
programs.
Changes: None.
Comment: Two commenters requested
clarification of how half-time
participation for students with
intellectual disabilities should be
determined, specifically, whether ‘‘halftime’’ is based on real time or credit
hours, and whether it is calculated per
semester or across the length of the
program. In a related issue, commenters
also suggested that the proposed
regulations place too much emphasis on
the academic portions of the program,
arguing that the half-time integration
criterion should not be linked
exclusively to coursework and
internships but should be expanded to
include outside activities.
Discussion: Section 668.231(a)(5)
specifies that a comprehensive
transition and postsecondary program is
a program that 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 a

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variety of activities that integrate
students with intellectual disabilities
into academic contexts with students
without disabilities. Institutions have a
fair degree of flexibility in determining
the meaning of ‘‘half-time participation’’
in designing a comprehensive transition
and postsecondary program: It may be
reasonably based on real hours, credit
hours, or a combination of the two, and
it may be calculated across the span of
the program or by term, as long as an
institution clearly explains in its
application to add an eligible program
how this will be determined.
With regard to the comments stating
that the proposed regulations place too
much emphasis on the academic
portions of the program, we disagree.
Section 668.231(a)(5) only requires that
the program require enrolled students to
have at least one half of their
participation in the program focus on
academic components. We fully expect
that the remaining portion of the
program will consist of other activities
that include having enrolled students
with intellectual disabilities participate
with students without disabilities in
such non-academic settings as clubs,
organizations, service projects, or other
university or community life activities.
Changes: None.
Comment: A few commenters
expressed concern that the proposed
definition of a student with an
intellectual disability in § 668.231(b)
does not exist in the Individuals with
Disabilities Education Act (IDEA).
Specifically, several commenters asked
which students would be considered
students with intellectual disabilities
under the HEA.
Discussion: Under § 668.231(b), a
student with an intellectual disability is
defined as a student with mental
retardation or a cognitive impairment
characterized by significant limitations
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 special
education or related services under the
IDEA. The Department recognizes that
disabilities other than mental
retardation, such as certain forms of
autism and traumatic brain injury, may
be considered intellectual disabilities.
Under § 668.233(c), a student with an
intellectual disability is eligible to
receive Federal Pell, FSEOG, and FWS
program assistance under subpart O of
part 668 (Financial Assistance for
Students with Intellectual Disabilities) if
the institution that offers the eligible
comprehensive transition and
postsecondary program obtains a record
from a local educational agency (LEA)

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that the student is or was eligible for
special education and related services
under the IDEA. This section clarifies
that if that record does not specifically
identify the student as having an
intellectual disability, the institution
must review all documentation
obtained, such as a documented
comprehensive and individualized
psycho-educational evaluation and
diagnosis of an intellectual disability by
a psychologist or other qualified
professional; or a record of the disability
from an LEA or State educational
agency (SEA), or government agency,
such as the Social Security
Administration or a vocational
rehabilitation agency, that identifies the
intellectual disability. Ultimately, the
institution determines whether a
student meets the definition of a student
with an intellectual disability for the
purposes of this subpart.
Changes: None.
Comment: Many commenters
disagreed with the requirement that a
student with an intellectual disability
must have gone through the formal
IDEA eligibility process to be eligible for
Title IV, HEA program assistance. They
argued that the Conference report
indicates that Congress intended to
include students who were homeschooled or went to a private school in
the definition of a student with an
intellectual disability. The commenters
further suggested that if the Department
maintains its position that only students
who have gone through the formal IDEA
eligibility process are eligible for Title
IV, HEA program assistance, then the
Department should issue guidance and
alerts to States, LEAs, students, parents,
parent training centers, and advocacy
organizations, reminding them that the
IDEA’s Child Find and Free Appropriate
Public Education (FAPE) in the Least
Restrictive Environment requirements
apply to all individuals who are still at
an age at which they could receive
special education services in their State.
Discussion: As discussed in the
preamble to the NPRM, we interpret the
statute as providing that a student who
has not gone through the formal IDEA
eligibility process does not meet the
definition of a student with an
intellectual disability. Specifically,
section 760(2) states that a student with
an intellectual disability means a
student who ‘‘is currently, or was
formerly, eligible for a FAPE under the
IDEA.’’ While the Department does not
wish to exclude students who have not
gone through this process, we do not
believe the statutory language permits
the Department to make these students
eligible. We encourage students to
obtain an IDEA eligibility determination

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while they are still age-eligible for IDEA
services. The Department will continue
to remind States and LEAs of their
responsibilities under the IDEA,
including under the child find provision
in section 612(a)(3), that they locate,
identify, and evaluate all children with
disabilities residing in the State,
including those who are in private
schools or are home-schooled.
Changes: None.
Program Eligibility (§ 668.232)
Comment: One commenter suggested
that, rather than requiring an institution
to apply to have a comprehensive
transition and postsecondary program
for students with intellectual disabilities
approved by the Department for Title
IV, HEA funding, the Department
simply require the institution to provide
assurances that it offers a program that
meets the criteria of a comprehensive
transition and postsecondary program
for students with intellectual
disabilities. The commenter argued that
this would provide a more streamlined
application process. The commenter
also noted that the HEOA authorizes a
new model demonstration program and
a coordinating center that will enable
the Department to gather information on
best practices and to work to develop
model accreditation standards for these
programs.
Discussion: The process for adding a
comprehensive transition and
postsecondary program to the list of
eligible programs at an institution
should not pose a large burden on
institutions, because it will be part of
the same process an institution now
uses to notify the Department of any
new program it seeks to include as an
eligible Title IV, HEA program. As far as
the model demonstration program and
coordination center, the Department has
a current National Institute of Disability
and Rehabilitation Research center
evaluating promising practices in this
area.
Changes: None.
Comment: One commenter requested
that the Department clarify whether
only currently existing comprehensive
transition and postsecondary programs
can be eligible for Department approval
under § 668.232. The commenter asked
if any comprehensive transition and
postsecondary program offered by an
institution is an eligible comprehensive
transition and postsecondary program.
Discussion: An institution may submit
to the Secretary for approval under
§ 668.232 a comprehensive transition
and postsecondary program that it
currently offers or a program that it is
ready to implement. The Secretary will
consider for approval any

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comprehensive transition and
postsecondary program that meets the
definitional requirements in
§ 668.231(a) for which an institution
submits an application in accordance
with § 668.232. There are currently no
comprehensive transition and
postsecondary programs approved by
the Department.
Changes: None.
Comment: Commenters suggested that
we add a new provision in § 668.232 to
require an institution to include in its
application for approval of a
comprehensive transition and
postsecondary program, a description of
how students with intellectual
disabilities are socially and
academically integrated into the campus
community to the maximum extent
possible.
Discussion: We do not believe that the
suggested language is necessary. Section
668.232(a) requires that institutions
provide a detailed description of the
comprehensive transition and
postsecondary program that addresses
all of the components of the program, as
defined in § 668.231, in their
application for approval by the
Department. One of those elements, in
§ 668.231(a)(6), specifies that a
comprehensive transition and
postsecondary program must provide
students with intellectual disabilities
opportunities to participate in
coursework and other activities with
students without disabilities. To comply
with these regulations, an institution
applying to add an eligible
comprehensive transition and
postsecondary program must address
this element by explaining how its
program will ensure that students with
intellectual disabilities are integrated
socially and academically with students
without disabilities.
Changes: None.
Comment: One commenter asserted
that the concept of a program is
different in special education than it is
in higher education in that, in the
special education context, a program is
typically an individualized set of
services and supports designed for a
single student. This commenter stated
that a set of services and supports
designed for a single individual student
to participate in regular college courses,
internships, and the like should
constitute a comprehensive transition
and postsecondary program. The
commenter questioned whether the
Department would approve such a
comprehensive transition and
postsecondary program for a single
student, and, if so, whether it would be
necessary for each individualized set of
services and supports to be approved by

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the Department as a separate program.
The commenter believed that, as long as
a basic structure of support is in place
for these programs, the services may be
individualized to meet the needs of a
single student or a group of students
and that the institution should only be
required to apply once for the ‘‘basic’’
program structure, and then be able to
offer individual variations of the
program as needed to individuals
without having to reapply for program
eligibility for each version of the
program.
Discussion: In general, an institution
must demonstrate in its application that
its comprehensive transition and
postsecondary program satisfies the
definitional criteria in § 668.231(a). An
institution may have one, or more than
one, comprehensive transition and
postsecondary program. A program may
be for only one student or for a group
of students, but each program must be
approved by the Department. To be
clear, the Department will not approve
a generalized structure that can later be
modified by the institution to be a
different program for specific students.
That said, once a program is approved,
it can be modified slightly for different
students. For example, a program
approved under § 668.231 may require a
specific number and type of courses,
along with other program requirements,
but that does not mean that each student
in that program will take exactly the
same courses. Much like the variation in
any student’s curriculum that results
from individual choices in elective
coursework and required academic
areas within a program, individual
students enrolled in an approved
comprehensive transition and
postsecondary program may end up
taking some different courses. All such
courses must be part of the same
approved program or part of a separately
approved program.
Changes: None.
Comment: One commenter suggested
that if a student with an intellectual
disability is dually enrolled in an LEA
and in a comprehensive transition and
postsecondary program, then the State
Accrediting Agency, SEA, and other
stakeholders should have input into the
accrediting process of the
comprehensive transition and
postsecondary program.
Discussion: The Department is not
requiring programmatic accreditation as
a condition for approving a
comprehensive transition and
postsecondary program. Under
§ 668.232(e), the institution is required
to inform its institutional accrediting
agency of its comprehensive transition
and postsecondary program if the

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institution applies to have that program
approved by the Department as an
eligible program for Title IV, HEA
program purposes. The accrediting
agency determines what it does with
that information.
Changes: None.
Comment: One commenter asked how
accreditation status was determined
when an institution and a non-profit
agency share responsibility for
providing and operating a
comprehensive transition and
postsecondary program through a formal
memorandum of agreement. The
commenter suggested that the
accreditation status of the non-profit
agency should be considered in the
accreditation of the program. Further,
under a situation such as this, the
commenter requested clarification as to
whether Title IV, HEA program
assistance could be applied toward the
costs for services and fees provided by
both the institution and the non-profit
agency.
Discussion: Only an institution
participating in the Title IV, HEA
programs may offer an eligible
comprehensive transition and
postsecondary program, as that term is
defined in § 668.231(a). For this reason,
the Department will take into account
only the institution’s accreditation
status in approving a comprehensive
transition and postsecondary program.
The accreditation of the non-profit
agency would not have an impact on the
eligibility of the program. Under § 668.5,
an eligible institution may contract out
a portion of the eligible program
through a written arrangement with
another eligible institution, an ineligible
institution, or an ineligible organization
to provide the educational program.
Section 668.5(c)(3) of the regulations
specifies that—
(1) The ineligible institution or
organization may not provide more than
25 percent of the educational program;
or
(2) The ineligible institution or
organization may provide more than 25
percent but not more than 50 percent of
the educational program, as long as—
(a) The eligible institution and
ineligible institution or organization are
not owned, or controlled by the same
individual, partnership, or corporation;
and
(b) The eligible institution’s
accrediting agency, or if the institution
is a public postsecondary vocational
educational institution, the State agency
listed in the Federal Register in
accordance with 34 CFR part 603, has
specifically determined that the
institution’s arrangement meets the

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agency’s standards for the contracting
out of educational services.
In terms of funding, the amount of
Title IV, HEA program assistance that a
student may receive for enrollment in a
comprehensive transition and
postsecondary program is based on the
student’s need, which is defined in
section 471 of the HEA as the cost of
attendance minus the student’s
expected family contribution minus any
estimated financial assistance received
by the student. Need-based aid that a
student receives may be used toward
any costs in the student’s cost of
attendance, including those incurred
through parts of the program that have
been contracted out to a non-profit
agency or other institution or
organization through a written
arrangement with the eligible institution
that offers the program.
Changes: None.
Student Eligibility (§ 668.233)
Comment: One commenter questioned
whether a student with an intellectual
disability would be disqualified from
receiving Title IV, HEA program
assistance if he or she has a legal
guardian.
Discussion: Having a legal guardian
would not preclude a student with an
intellectual disability from receiving
Federal student aid funds. It may,
however, affect the student’s
dependency status, which is taken into
account in determining a student’s
financial need. Therefore, having a legal
guardian may affect the amount of
financial aid funds for which the
student may be eligible.
Changes: None.
Comment: Several commenters asked
for clarification on whether a high
school student who receives special
education and related services can also
be enrolled in a comprehensive
transition and postsecondary program.
Discussion: It is the Department’s
longstanding position that a student
with a disability may be dually enrolled
in secondary school and a
postsecondary institution, although
such dual enrollment precludes the
student from being eligible for Title IV,
HEA aid.
The provisions in section 612(a)(2) of
the IDEA and 34 CFR 300.110 require
States to ensure that public agencies
take steps to ensure that children with
disabilities have access to the same
program options that are available to
nondisabled children in the area served
by the agency. This would apply to dual
enrollment programs in postsecondary
or community-based settings. However,
we do not believe that the IDEA, or its
implementing regulations, requires

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public agencies to provide dual
enrollment programs in postsecondary
or community-based settings for
students with disabilities, if such
programs are not available to secondary
school students without disabilities. In
a State that offers dual enrollment
programs to secondary school students,
a high school student with an
intellectual disability, as defined under
§ 668.231(b), who is receiving special
education and related services may be
dually enrolled in an eligible
comprehensive transition and
postsecondary program under § 668.232.
Changes: None.
Comment: Several commenters
expressed concern regarding the
provision of special education and
related services to a student with an
intellectual disability who is dually
enrolled in secondary school and a
comprehensive transition and
postsecondary program. The
commenters asked whether the LEA
would pay for the comprehensive
transition and postsecondary program or
whether the student with an intellectual
disability would apply for Federal Pell,
FSEOG and FWS program assistance.
Discussion: Under section 612(a)(1) of
the IDEA and 34 CFR 300.101, each
State and its LEAs must make FAPE
available to all children with specified
disabilities residing in the State, in
mandatory age ranges. Under 34 CFR
300.17(c) of the regulations
implementing Part B of the IDEA, FAPE
includes an appropriate preschool,
elementary school, or secondary school
education in the State involved. Under
the IDEA, LEAs are not required to
provide FAPE in postsecondary
education settings. In general, Part B,
IDEA funds could be used for
appropriate education services included
in an IEP that are provided outside of a
public or private elementary or
secondary school though, if, under State
law, the education would be considered
secondary school education.
A student with an intellectual
disability is eligible to receive Federal
Pell Grant, FSEOG, and FWS program
assistance under § 668.233 if the student
satisfies the general student eligibility
requirements under § 668.32, except for
paragraphs (a), (e), and (f) of that
section. Section 668.32(b) states that a
student is not eligible to receive Federal
Pell Grant, FSEOG, or FWS program
assistance if he or she is enrolled in
elementary or secondary school. In
other words, if a student is dually
enrolled in a secondary school and an
eligible comprehensive transition and
postsecondary program, he or she is not
eligible for Federal Pell, FSEOG, and
FWS program assistance. Therefore,

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while an LEA could use Part B, IDEA
funds to support a dually enrolled
student with a disability’s participation
in a comprehensive transition and
postsecondary program if the services
the student received in that program
were considered secondary school
education under State law and were
included in the student’s IEP, the
student would not be eligible to apply
for Federal Pell Grant, FSEOG, and FWS
program assistance. The Department
will monitor the establishment of these
comprehensive transition and
postsecondary programs, and may
consider at some point in the future
using the Secretary’s waiver authority
under the statute to permit qualifying
students who are dually enrolled in
these programs to also receive Federal
Pell Grant, FSEOG, and FWS program
assistance. If the Department were to
adopt such an approach, we would
provide additional information
concerning the procedures and
availability of any such waivers at that
time.
Changes: None.
Comment: A few commenters
requested that the regulations clarify
whether the LEA is responsible for
monitoring the progress of a student
who is dually enrolled in a secondary
school and a comprehensive transition
and postsecondary program.
Discussion: If a student with an
intellectual disability who is dually
enrolled in a comprehensive transition
and postsecondary program receives
services in that program that are
considered secondary education in the
State and are included in the student’s
IEP, the SEA or LEA must monitor the
student’s progress toward annual
academic and functional goals, because
those entities are responsible, under the
IDEA, for ensuring that the services
identified in the student’s IEP are
provided. Additionally, eligible
comprehensive transition and
postsecondary programs, which operate
through institutions, must meet the
program requirements in § 668.232,
including establishing a policy for
determining whether a student enrolled
in the comprehensive transition and
postsecondary program is making
satisfactory academic progress. In all
cases, the Department encourages the
SEA or LEA and the institution offering
the comprehensive transition and
postsecondary program to enter into a
formal agreement of understanding that
identifies what the SEA or LEA will
provide to the dually-enrolled student,
and what the institution will provide to
meet the requirements of an eligible
comprehensive transition and
postsecondary program, and how the

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student’s progress will be assessed.
Furthermore, section 612(a)(12) of the
IDEA and its implementing regulations
at 34 CFR 300.154 require States to
develop and implement interagency
agreements or other written mechanisms
for interagency coordination to ensure
that services necessary to provide FAPE
to children with disabilities within the
State that are provided or paid for by
other public agencies are provided or
paid for. These provisions mean that if
public agencies of a State operate
comprehensive transition and
postsecondary programs that dually
enroll students who are covered by the
IDEA to provide services included in
the students’ IEPs, the State must ensure
that interagency agreements or other
written mechanisms meeting these
requirements are in place.
Changes: None.
Comment: A few commenters
requested that the Department clarify
the interaction between the receipt of
Title IV, HEA aid and other benefits that
the student may receive, such as
Medicaid or vocational rehabilitation
funding. Specifically, commenters
expressed concern that a student’s
receipt of Medicaid benefits or other
benefits may be disrupted due to the
student’s receipt of Federal Pell Grant,
FSEOG, or FWS program assistance.
Discussion: These final regulations
implement provisions of the HEA only.
They do not attempt to address any
overlap between the protections and
requirements of the State Medicaid
program under Title XIX of the Social
Security Act. Additional information
concerning eligibility requirements for
other programs may be sought from the
agency responsible for implementing
those programs.
With respect to financial aid available
to students under the HEA, a student’s
financial aid assistance may be affected
by aid received under other programs,
such as Medicaid. While a student’s
Federal Pell Grant award would not be
reduced based on any other aid
received, the amount of FSEOG and
FWS program assistance for which a
student is eligible is based, in part, on
the student’s total estimated financial
assistance (EFA), as defined in
§ 673.5(c). A student’s FSEOG and FWS
awards, when combined with the
student’s other EFA, may not exceed the
student’s financial need. Therefore, a
student’s FSEOG and FWS awards may
be affected by other aid the student
receives.
Changes: None.
Comment: Several commenters
expressed concern regarding the use of
a student’s summary of academic and
functional performance to meet the

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requirements under § 668.233(c).
Commenters stated that a student’s
summary of academic and functional
performance should not serve as
acceptable documentation to establish
that the student has an intellectual
disability.
Discussion: To better prepare for the
student’s enrollment in a
comprehensive transition and
postsecondary program, the Department
encourages institutions to consider
using a student’s summary of academic
achievement and functional
performance (SOP) as described in 34
CFR 300.305(e)(3). That said, the
Department recommends that
institutions use the SOP only as
supplemental information under
§ 668.233(c).
Section 300.305(e)(3) of the
implementing regulations of the IDEA,
consistent with section 614(c)(5)(B)(ii)
of the IDEA, states that the summary
required when a child graduates with a
regular diploma or exceeds the age
eligibility under State law must include
information about the child’s academic
achievement and functional
performance, as well as
recommendations on how to assist the
child in meeting the child’s
postsecondary goals. The Department
believes that this supplemental
information would provide the
institution with a better understanding
of a student’s abilities and limitations in
determining an appropriate
comprehensive transition and
postsecondary program for the student.
Changes: None.
Comment: A few commenters
expressed concern that a student’s
documentation from an SEA under
§ 668.233(c) might not include terms
such as ‘‘intellectual disability’’ or
‘‘mental retardation’’ and, therefore,
may not be useful in establishing
eligibility as student with an intellectual
disability. One commenter stated that,
in its school district, a student’s IEP
does not include a disability category.
The commenter asked how a student’s
eligibility in this situation would be
determined and whether the school
district would have to complete an
evaluation that states that the student
has an intellectual disability. Another
commenter asked if a student would
need to have a specific diagnosis of
intellectual disability to be eligible.
Discussion: The issue raised by these
comments is similar to the one
addressed in response to comments on
§ 668.231(b). Section 668.233(c) requires
that an institution obtain a record from
an LEA that the student is or was
eligible for special education and
related services under the IDEA, and if

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the record does not identify the student
as having an intellectual disability,
documentation establishing that the
student has an intellectual disability.
The Department recognizes that
documentation from an LEA (an IEP or
transition plan, for example) may not
state that a student has an intellectual
disability. The Department believes that
§ 668.233(c)(1) and (c)(2) addresses this
issue, by requiring the institution to
review all documentation obtained to
establish that the student has an
intellectual disability. Nothing in these
provisions, however, requires LEAs to
perform or pay for evaluations that they
do not need for purposes of meeting
requirements of the IDEA.
Changes: None.
Comment: A few commenters
suggested that, whenever possible,
existing documentation from school
records or other sources, such as
previous evaluations conducted by
qualified professionals from public
agencies, be used to determine that the
student has an intellectual disability,
and that the process for making this
determination should be minimally
burdensome for students, families, and
institutions.
Discussion: During negotiated
rulemaking, some negotiators expressed
concern that institutions would require
updated evaluations that could be costly
or cost prohibitive. In the preamble to
the NPRM, the Department stated that
an institution, as the party responsible
for determining students’ eligibility for
the Federal Pell, FSEOG, and FWS
programs, would be allowed to accept
the most recent documentation, even if
it is more than a few years old. To
further clarify, we do not believe it is
appropriate to require in these
regulations that the documentation
submitted by the student have a
minimum or maximum age, as long as
the information used is the best
available under the circumstances.
Under § 668.233(c), if the record from
the LEA does not state that the student
has an intellectual disability, the
institution also would have to obtain
documentation to establish that the
student has an intellectual disability, as
defined under § 668.231(b).
Changes: None.

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Part 690

Federal Pell Grant Program

Two Federal Pell Grants in an Award
Year (§§ 690.67, 690.64, and 690.63(h))
Student Eligibility for a Second
Scheduled Award (§ 690.67)
Comments: Several commenters
agreed with the proposed regulations
that would amend § 690.67(a)(1) to
provide that a student would be eligible

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for a second Scheduled Award if the
student has earned in an award year at
a minimum the credit or clock hours of
the first academic year of the student’s
eligible program. However, a significant
number of commenters objected to the
proposed regulations as they would
apply to term-based programs. In
general, the commenters were
concerned that the regulations would
unduly limit the benefits to students of
two Federal Pell Grants in an award
year, would be overly complex and
burdensome for institutions to
administer, and would create confusion
for students due to uncertainty in
determining the students’ Federal Pell
Grants and due to the different
eligibility requirements for a second
Scheduled Award. The commenters also
believed that enabling an individual
student to enroll in additional
coursework during an award year
should be considered acceleration
without reference to the program’s
length. Some commenters proposed that
eligibility for payments be determined
based on previous eligibility used and
without reference to completion of the
credit hours of an academic year. Some
commenters proposed, as an alternative,
for the Department to require that a
student successfully complete the hours
for which the Federal Pell Grant was
paid to qualify for the second Scheduled
Award.
One commenter was concerned that
the requirements would adversely affect
students taking noncredit and reduced
credit remedial coursework.
Several commenters questioned the
Department’s concern 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
HEA that a student’s lifetime eligibility
is limited to nine Scheduled Awards if
a student receives a Federal Pell Grant
for the first time on or after July 1, 2008,
did not provide sufficient minimum
standards for ensuring a student’s
advancement in his or her eligible
program. Two commenters
recommended revising the satisfactory
academic progress requirements as an
alternative to the proposed regulations.
Discussion: We agree that the
proposed regulations might unduly
limit a Federal Pell Grant-eligible
student’s ability to meet the costs of
attending additional courses that would
enable the student in an award year to
accelerate his or her progress toward
program completion and that the final
regulations should not impede such
acceleration. In addition, we agree that
the proposed regulations could be
considered complex and burdensome
for some institutions to administer. We

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agree, in principle, with the
recommendations of some commenters
that payment should be tied to
successful completion of the credit or
clock hours for which a student has
received Federal Pell Grant payments.
Based on these comments, we believe it
would be appropriate to require that, for
a student to be eligible for payments
from a second Scheduled Award in an
award year, the student must be
enrolled in credit or clock hours that
were attributable to the student’s second
academic year. A student in a termbased program would cease to be
eligible for a payment from the second
Scheduled Award if the student ceased
to be enrolled in the credit hours
attributable to the second Scheduled
Award prior to the date for any
recalculation for changes in enrollment
status required by the institution’s
recalculation policies established under
§ 690.80(b).
The eligibility requirements for a
second Scheduled Award in an award
year must be different from those for a
first award, in that section
401(b)(5)(A)(i) of the HEA requires
enrollment on at least a half-time basis
to receive a second Scheduled Award.
This difference may be disconcerting to
some students. However, we believe
that students will be able to understand
these requirements.
We do not believe the regulations
would adversely affect a student
enrolled in noncredit or reduced-credit
remedial coursework. The student’s
remedial coursework would be
considered in accordance with the
requirements for determining
equivalence to full-credit coursework
under 34 CFR 668.20 when determining
the student’s eligibility for a second
Scheduled Award in an award year.
We do not agree with the commenters
concerning the efficacy of the current
satisfactory academic progress standards
and the new lifetime limit of nine
Scheduled Awards in providing a
sufficient basis for encouraging a
student to accelerate program
completion. Some institutions have
adopted reasonable standards of
satisfactory academic progress that
would address our concerns. Others
have used the flexibilities and options
in the current regulations to fashion
institutional standards that may meet
the letter of the requirements in 34 CFR
668.16(e) but in our view allow students
who are not progressing satisfactorily to
continue to receive title IV aid. Because
of this variability and our belief that the
new lifetime limit for Federal Pell
Grants does not provide sufficient
encouragement to accelerate program
completion, we do not agree with the

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suggestions that a payment of a second
Scheduled Award may be made without
reference to a student’s completion of
the first academic year in an award year.
Further, we believe that relying on
current satisfactory progress standards
would not be in accord with the student
achievement and accountability
principles for using additional funds
appropriated for Federal Pell Grants
under the American Recovery and
Reinvestment Act of 2009 (Pub. L. 111–
5). We agree with the commenters who
recommended that we consider revising
the satisfactory academic progress
standards and have included this issue
as a likely topic in the negotiated
rulemaking on program integrity issues
that is scheduled to commence on
November 2, 2009. Information on this
new negotiated rulemaking was
published in the Federal Register on
May 26, 2009 (74 FR 24728) and
September 9, 2009 (74 FR 46399),
respectively.
Changes: We are revising
§ 690.67(a)(1) to provide that an
institution participating in the Federal
Pell Grant Program shall award a
payment of a second Scheduled Award
to a student in an award year if an
otherwise eligible student is enrolled for
credit or clock hours that are
attributable to the student’s second
academic year in the award year. As a
result of this change, we are also making
conforming changes in § 690.67(c) for
special circumstances in determining
whether a student may qualify for a
second Scheduled Award and in
§ 690.64 as discussed under the heading
‘‘Payment Period in Two Award Years
(§ 690.64).’’
Transfer Students (§ 690.67(b))
Comments: One commenter
supported § 690.67(b) as a
straightforward treatment of transfer
students. Another believed no provision
was needed for transfer students if the
Secretary ceased to require that
eligibility for payment from a second
Scheduled Award be based on
completing the hours of the first
academic year. One commenter cited
examples where the provisions in
§ 690.67(b) would result in inequitable
treatment between continuously
enrolled and transfer students. Another
commenter believed that we should
provide an ‘‘hours-earned’’ method as
an option under which an institution
with the necessary information may
determine the credits or clock hours
earned in the award year at other
institutions that would be applicable to
completing the first academic year. The
commenter believed that there should
also be a limitation on the need to

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recalculate a student’s eligibility based
on the receipt of information subsequent
to disbursements of a second Scheduled
Award. Some commenters believed that
the determination of a transfer student’s
credit or clock hours should be based on
the percentage of the student’s
Scheduled Award used at the prior
institution.
Discussion: Based on the
Department’s revision of § 690.67(a)(1),
determining a transfer student’s credit
or clock hours toward completion of the
first academic year in an award year is
still required. During negotiated
rulemaking, the non-Federal negotiators
noted that determination of the actual
credits or clock hours earned at other
institutions would be burdensome to the
institution into which a student
transfers and generally would be
administratively difficult. To perform a
determination of the actual credit or
clock hours earned at other institutions,
an institution would need to have the
necessary information to determine
whether credit or clock hours were
earned in the current award year,
regardless of whether the institution
accepted them on transfer. The
institution would also be required to
resolve ambiguities such as whether the
credit or clock hours of a summer
payment period were considered earned
in the current award year or whether
credit or clock hours in a transcript
were nonapplicable hours based on
Advanced Placement (AP) programs,
International Baccalaureate (IB)
programs, testing out, life experience, or
similar competency measures.
While we recognized that there will
be some inequities in applying the
assumption method in § 690.67(b), we
continue to believe that this method is
appropriate for evaluating a transfer
student’s eligibility when the alternative
would be administratively burdensome
to an institution. However, we also
agree with the commenter who
recommended that, if an institution
chooses to do so, it may use an hoursearned method to determine the actual
credit or clock hours earned at other
institutions during the award year.
Under § 690.67(b)(2) an institution
that chooses to use the assumption
method 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. These same proportions are
used to calculate the percentage of
Scheduled Award used by a student.
Following the provisions of

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§ 690.67(b)(2) would yield a more
accurate determination of the credit or
clock hours considered to be transferred
than merely applying the percentage of
Scheduled Award used.
We agree with the concern regarding
the receipt of additional information
regarding a student’s payments at other
institutions subsequent to determining
the student’s eligibility for a second
Scheduled Award and agree that some
limitation on requiring a recalculation
of prior payments would be appropriate.
An institution may correctly make a
determination of a student’s eligibility
for a second Scheduled Award for a
prior payment period based on the
information available at that time. We
do not believe it is necessary to impose
the burden of requiring the institution to
adjust a determination for a prior
payment period that was correctly made
during that prior payment period.
However, we believe it is appropriate to
provide that the institution may, at its
option, revise the student’s eligibility
for a prior payment based the receipt of
additional information.
Changes: We are revising § 690.67(b)
to provide that an institution may, on an
individual student basis, use an hoursearned method for determining a
student’s credit or clock hours earned at
other institutions in an award year as an
alternative to the assumption method.
We are also clarifying that an institution
may, but is not required to, recalculate
a student’s payment in a prior payment
period in an award year if the
institution receives information that
would change the student’s eligibility
for a second Scheduled Award in the
prior payment period. The institution
would be required to take into
consideration the new information in
determining eligibility for the current
payment period if that payment period
is in the same award year.
Nonapplicable Credit or Clock Hours
(§ 690.67(d))
Comment: One commenter did not
support excluding the AP, IB, testing
out, life experience, or similar
competency measures in determining a
student’s eligibility for a second
Scheduled Award. The commenter
believed that the exclusion would be
burdensome to administer.
Discussion: We do not agree with the
commenter. 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.
We continue to believe that this
provision ensures that only those credits
or clock hours earned in the award year
are considered in determining the

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student’s eligibility. While the provision
may create some burden, it is essential
to making a valid determination of a
student’s eligibility for a second
Scheduled Award.
Changes: None.
Payment Period in Two Award Years
(§ 690.64)
Comments: Several commenters
supported the concept of requiring that
a payment period scheduled to occur in
two award years, a ‘‘crossover’’ payment
period, be assigned to the award year in
which the student would receive the
greater payment for the payment period.
A significant number of commenters
believed these requirements would be
administratively difficult to administer.
Several commenters believed that the
financial aid administrator should
continue to have the discretion to assign
a ‘‘crossover’’ payment period to either
award year and should not be required
to assign a crossover payment period to
the award year in which the student
would receive the greater payment for
the payment period. The commenters
also believed that a financial aid
administrator should not be required to
reassign the crossover payment period if
subsequent information is received that
would lead to a higher Federal Pell
Grant for a student as required in
§ 690.64 in the case of students enrolled
on at least a three-quarter-time basis.
One commenter believed that these
requirements mandated that a student
must file a Free Application for Federal
Student Aid (FAFSA) for a crossover
payment period. One commenter
believed that a deadline should be
established for being required to make
reassignments of crossover payment
periods.
Several commenters believed that the
determination of the higher payment
should be made only at the time the
Federal Pell Grant is initially awarded
or packaged. Some commenters were
concerned that increasing a crossover
payment would necessitate cancelling
all or a portion of a student’s loan. One
commenter believed the increased
payments would lead to overpayments
in Federal Work-Study (FWS)
assistance. The commenters believed
these adjustments in the students’
awards would confuse students. Some
commenters were concerned that
requiring that the crossover payment
period be in the second award year
would adversely affect a student’s
eligibility for loans since the institution
would be required to place the crossover
payment period in the second award
year for purposes of awarding FFEL and
Direct Loans. Two commenters stated
that the award year placement of a

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student’s Federal Pell Grant may
adversely affect the amount of the
student’s State grant aid. Commenters
were also concerned that institutions
would delay disbursement to students
eligible for a higher payment from the
second award year until Federal funds
were available on July 1 for that year.
One of these commenters noted that
State law prohibited an institution from
advancing funds not yet received. The
commenter proposed that, if necessary
due to State law, an institution should
be allowed to disburse funds at the
beginning of a crossover payment period
from the first award year to a student
eligible for a higher payment form the
second award year and then make the
necessary adjustments after July 1 to
provide the higher payment from the
second award year. The commenter
believed that this process would ensure
funds are available to the student at the
start of the payment period but
ultimately yield the greater payment.
One commenter questioned whether the
results of verifying application
information could lead to a
reassignment of the payment period and
adversely affect a student. Several
commenters recommended that if a
payment must be assigned to the
subsequent award year, the Federal Pell
Grant should be considered disbursed
for purposes of the return of title IV
funds under 34 CFR 668.22 even when
the student withdraws prior to July 1.
Discussion: We continue to believe
that a crossover payment period should
be assigned in a way that maximizes a
student’s eligibility for that payment
period even if this causes some
administrative difficulties. The
Department would consider an
institution that delays disbursing funds
from the second award year until July 1
of that year, to be in compliance with
these requirements if the institution
disbursed funds at the beginning of the
crossover payment period from the first
award year to a student eligible for a
higher payment from the second award
year and then made the necessary
adjustments after July 1 to provide the
higher payment from the second award
year as soon as funds were available on
July 1. There is no requirement that a
student submit a FAFSA for both award
years to receive payment for a crossover
payment period. We believe these
benefits will be understood and
appreciated by students. Further, with
the changes made by the Department in
these final regulations to § 690.67(a)(1),
assigning a crossover payment period to
the subsequent award year would
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student’s ability to establish eligibility

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for a second Scheduled Award in that
subsequent year.
Contrary to the concerns expressed by
some commenters, one of the major
additional benefits for students of this
requirement in § 690.64 is a reduction in
student borrowing. The increase in the
student’s Federal Pell Grant payment
would increase the student’s estimated
financial assistance and thus reduce the
student’s need for loan funds for the
payment period. Also, while it is
unlikely that a combination of an
increased Federal Pell Grant payment
and FWS would result in a need to
reduce the FWS award as one
commenter indicated, no overaward for
earnings from work would be created in
the very limited cases in which a
student may need to have FWS
assistance canceled.
We do not agree with the commenters
who were concerned that requiring that
the crossover payment period in the
second award year would adversely
affect a student’s eligibility for loans.
The commenters believed that the
institution would be required to place
the crossover payment period in the
new award year for purposes of
awarding FFEL and Direct Loans. Under
the requirements of the Title IV, HEA
programs, the award year assignment of
a student’s Federal Pell Grant has no
affect on the award year assignment of
the student’s other Federal student
assistance, including loans. The amount
of the Federal Pell Grant is estimated
financial assistance for determining the
need in the other programs. Institutions
should ensure that their information
technology systems provide for this
necessary flexibility to ensure that
students receive appropriate assistance
in each award year. System
requirements should not be the basis for
limiting the assistance for which a
student is eligible.
We agree with the commenters that,
in some limited instances under the
current award regulations for State grant
programs, a student’s State grant may be
reduced because of an increase in the
student’s Federal Pell Grant. We do not
believe that we should use these limited
circumstances as the basis for denying
a student a higher Federal Pell Grant
crossover payment. We believe that the
States can make the necessary
adjustments to their programs to
maximize the overall aid available to
these needy students.
We do not agree that a reassignment
of the payment period as a result of
verification of application information
would adversely affect a student. If, as
a result of verification of application
information, a student’s EFC and
Federal Pell Grant eligibility changes for

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an award year, that result would be
taken into consideration in assigning a
student’s crossover payment. If, for
example, the crossover payment period
were assigned to the first award year
because it yielded the maximum Federal
Pell Grant payment but verification of
application information resulted in a
lower EFC and increased Federal Pell
Grant eligibility for the second award
year, the crossover payment period
would be reassigned to the second
award year.
With regard to the return of title IV
funds, a disbursement for the
subsequent award year may be made
prior to July 1 using institutional funds
rather than waiting to disburse when the
subsequent award year Federal funds
become available on July 1. Also,
notwithstanding whether an institution
chooses to make such a disbursement,
the return of title IV funds takes into
consideration both funds that were
disbursed as well as funds that could
have been disbursed.
Based on these comments, we will
establish deadlines specifically for these
determinations through publication of a
Federal Register notice. We will clarify
the deadline when the receipt of
information would require reassignment
for a higher crossover payment and a
deadline for a subsequent period when
the receipt of information would
support, but not require, an institution
to make reassignments for a higher
crossover payment. We expect to set the
initial deadline based on the last date
for submitting Student Aid Reports or
Institutional Student Information
Records for the first award year or a
similar date as appropriate. During the
subsequent period of time prior to the
second deadline, an institution may
establish such policies concerning
reassignment of the crossover payment
period as it determines best meet the
needs of its students and the institution.
Changes: We are revising proposed
§ 690.64(b) to require that, regardless of
a student’s enrollment status, the
crossover payment period must be
assigned to the award year in which the
student would receive the greater
payment for the payment period at the
time the student’s Federal Pell Grant is
initially calculated. We are also
clarifying the deadlines by which an
institution must take into account any
information that changes a student’s
payment by providing that an
institution must make a reassignment to
the award year providing the greater
payment based on any additional
information received by a deadline that
the Secretary establishes through
publication in the Federal Register for
each award year. We are further

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providing that an institution may make,
but is not required to make, a
reassignment if additional information
is received after the date established for
required reassignments and not later
than the deadline date for the first
award year for administrative relief
based on unusual circumstances that the
Secretary establishes through
publication in the Federal Register for
each award year.
We are also removing proposed
§ 690.64(a)(2) and (c). Section
690.64(a)(2) provided that a student may
request a determination concerning the
assignment of a crossover payment
period, and § 690.64(c) required the
assignment of a payment period with
more than six months scheduled to
occur within one award year to be
assigned to that award year. These
proposed provisions are no longer
relevant under these revised
requirements.
Part 692—Leveraging Educational
Assistance Partnership Program Grants
for Access and Persistence Program
(Subpart C of Part 692 Consisting of
§§ 692.90 Through 692.130)
Recruiting Eligible Students
(§ 692.101(b)(2))
Comment: One commenter was
concerned that early information and
intervention, mentoring, or outreach
programs (early intervention programs)
are integral to the GAP Program, and the
commenter believed that it would be
difficult to identify students
participating in early intervention
programs who would be eligible for a
LEAP Grant under GAP. The commenter
believed that under current privacy laws
identifying students who have
participated in an eligible early
intervention program and matching
them with their FAFSA submissions
and then with a GAP-participating
postsecondary institution would appear
to be impossible. The commenter
questioned whether these requirements
could be redefined to indicate that if the
State partners with itself or another
organization to provide early
intervention programs at a particular
high school that anyone who graduates
with that high school cohort would be
considered a ‘‘participating student.’’
The commenter believed this definition
would remove the requirement of
having to have personally identifiable
information for each participant. The
commenter also noted that additional
guidelines would be needed for homeschooled students or those who
participate in an early intervention
program through a non-school-based
program.

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Discussion: To the extent that the
privacy provisions of FERPA (34 CFR
part 99) apply to the particular
circumstances of a State agency and
other GAP participants in the State, the
Department will provide technical
assistance on any issues raised by the
applicability of FERPA on a case-bycase basis.
Changes: None.
Executive Order 12866
1. 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
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. Therefore, 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
As discussed in the NPRM, these
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,
peer-to-peer file sharing and copyright
infringement, teach-outs, readmission of
servicemembers, and non-title IV
revenue.

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Regulatory Alternatives Considered
Regulatory alternatives were
considered as part of the rulemaking
process. These alternatives were
reviewed in detail in the preamble to
the NPRM under both the Regulatory
Impact Analysis and the Reasons
sections accompanying the discussion
to each regulatory provision. To the
extent that they were addressed in
response to comments received on the
NPRM, alternatives are also considered
elsewhere in this preamble to the final
regulations under the Discussions
sections related to each provision. No
comments were received related to the
Regulatory Impact Analysis discussion
of these alternatives.
As discussed above in the Analysis of
Comments and Changes section, these
final regulations reflect specific HEOA
requirements, in many cases using
language drawn directly from the
statute, and minor revisions in response
to public comments. In most cases,
these revisions were technical in nature
and intended to address drafting issues
or to provide additional clarity. None of
these changes result in revisions to cost
estimates prepared for and discussed in
the Regulatory Impact Analysis of the
NPRM.
Benefits
As discussed in the NPRM, benefits
provided in these regulations include
greater transparency about consumer
information and campus safety for
prospective and current students at
institutions participating in the Federal
student financial assistance programs,
copyright infringement policies,
requirements for readmission of
servicemembers, explanation of
extenuating circumstances under which
TEACH Grant service obligations may
be excused, requirements for programs
serving students with intellectual
disabilities, and additional guidelines
for Federal grant and work-study
programs. It is difficult to quantify
benefits related to the new institutional
requirements, as there is little specific
data available on consumers’ use of
such information and the effect of the
other provisions. In the NPRM, the
Department requested comments or data
that would support a more rigorous
analysis of the impact of these
provisions. No comments or additional
data were received.
Benefits under these regulations flow
directly from statutory changes included
in the HEOA; they are not materially
affected by discretionary choices
exercised by the Department in

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developing these regulations, or by
changes made in response to comments
on the NPRM. As noted in the
Regulatory Impact Analysis in the
NPRM, these provisions result in net
costs to the government $1,644 million
over years 2010–2014.

provisions included in these
regulations. There is no data indicating
that the extensive new requirements for
disclosures for student loan program
participants will have any impact on the
volume or composition of Federal
student loans.

Costs
As discussed extensively in the
Regulatory Impact Analysis of the
NPRM, many of the statutory provisions
implemented though these regulations
will require regulated entities to
develop new disclosures and other
materials, as well as accompanying
dissemination processes. In total, these
changes are estimated to increase
burden on entities or individuals
participating in the Federal student
assistance programs by 253,718 hours.
Virtually all this increased burden is
associated with institutions, with 80
percent related to two provisions: peerto-peer file sharing and the award of two
Pell Grants in a single award year. An
extremely small amount—384 hours—is
associated with students. The
monetized cost of this additional
burden, using loaded wage data
developed by the Bureau of Labor
Statistics, is $4.7 million.
Given the limited availability of data
underlying these burden estimates, in
the NPRM the Department requested
comments and supporting information
for use in developing more robust
estimates. In particular, we asked
institutions to provide detailed data on
actual staffing and system costs
associated with implementing these
regulations, especially the provisions
related to peer-to-peer file sharing and
administering two Pell Grants in one
year. No comments or additional data
were provided.

Assumptions, Limitations, and Data
Sources

Net Budget Impacts
HEOA provisions implemented by
these regulations are estimated to have
a net budget impact of $297.4 million in
2010 and $1.6 billion over FY 2011–
2014. Consistent with the requirements
of the Credit Reform Act of 1990, budget
cost estimates for the student loan
programs reflect the estimated net
present value of all future nonadministrative Federal costs associated
with a cohort of loans. A cohort reflects
all loans originated in a given fiscal
year.
The budgetary impact of the
regulations is entirely driven by
statutory changes involving the
provision of two Pell Grants in a single
award year. The Department estimates
almost no budgetary impact for other

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As noted in the NPRM, because these
regulations 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
regulations do not exist. Costs have been
quantified for five years. 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,
including especially the Fiscal
Operations Report and Application to
Participate (FISAP); 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. Data
from other sources, such as the U.S.
Census Bureau, were also used.
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://
www.Whitehouse.gov/omb/Circulars/
a004/a-4.pdf), in Table 2 below, we
have prepared an accounting statement
showing the classification of the
expenditures associated with the
provisions of these regulations. This
table provides our best estimate of the
changes in Federal student aid
payments as a result of these
regulations. The estimate for the period
from 2010 to 2014 uses OMB
discounting methodology and discount
rates of seven and three percent.
Expenditures are classified as transfers
from the Federal government to student
loan borrowers (for expanded loan
discharges and teacher loan forgiveness
payments).

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TABLE 2—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES
[In millions]
Category

Transfers

Annualized Monetized Transfers ..............................................................

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From Whom to Whom? ............................................................................

Regulatory Flexibility Act Certification
The Secretary certifies that these
regulations will not have a significant
economic impact on a substantial
number of small entities. These
regulations affect institutions of higher
education, lenders, and guaranty
agencies that participate in Title IV,
HEA programs and individual students
and loan borrowers. 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 small
governmental jurisdictions, which are
comprised of cities, counties, towns,
townships, villages, school districts, or
special districts, with a population of
less than 50,000.
As discussed in more detail in the
Regulatory Flexibility Act section of the
NPRM, data from the Integrated
Postsecondary Education Data System
(IPEDS) indicate that roughly 2,660
institutions participating in the Federal
student assistance programs meet the
definition of ‘‘small entities.’’ More than
half of these institutions are short-term,
for-profit schools focusing on vocational
training. Other affected small
institutions include small community
colleges and tribally controlled schools.
The Department estimates that total
burden on small institutions from these
regulations will be thirty-nine hours or
less. Burden on institutions associated
with these regulations is largely
associated with the requirements to
establish systems to limit illegal peer-topeer file sharing, readmission
requirements for servicemembers, and
new disclosures related to graduation
rates, retention rates, fire safety, and
campus safety. In each of these cases,
the Department believes the new
provisions do not represent a significant
burden on a large number of schools.
Provisions related to peer-to-peer file
sharing, for example, only affect schools
that provide students with schoolmaintained and operated internet
services; many small institutions lack
the resources or need to provide such
services and so will not be affected by
the provisions. For those that will be
affected, the Department is encouraging

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$281 (7% discount rate).
$277 (3% discount rate).
Federal Government to Student Loan Borrowers.

the adoption of best practices which
should reduce institutional burden.
Data from the National Center for
Education Statistics indicate that
roughly two percent of students at small
institutions receive veteran’s benefits;
this figure significantly overstates the
number of servicemembers likely to be
readmitted under the regulations, but
even using the two percent figure as a
proxy for affected students, the
Department believes this limited
population will not represent a
significant burden for small institutions.
For the consumer information
requirements, vocational institutions,
which make up more than half of the
schools meeting the definition of ‘‘small
entities,’’ are already required to collect
and distribute much of the required
data. Even for schools that will face new
requirements to collect and disseminate
information about campus activities, the
Department estimates additional burden
at most institutions of three hours or
less.
In the NPRM, the Secretary invited
small institutions to submit data
supporting comments related to whether
they believe the changes would have a
significant economic impact on them.
No data was received. In the absence of
this data, and based on our internal
analyses, the Department believes the
new requirements contained in these
regulations do not impose significant
new costs on a substantial number of
small institutions.
Guaranty agencies are State and
private nonprofit entities that act as
agents of the Federal government, and
as such are not considered ‘‘small
entities’’ under the Regulatory
Flexibility Act. The impact of the
regulations on individuals is not subject
to the Regulatory Flexibility Act.
Paperwork Reduction Act of 1995
Final §§ 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, 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

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Management and Budget (OMB) for its
review.
Section 600.5(a)(5)—Definition of
Baccalaureate Liberal Arts Programs
Offered by Proprietary Institutions
The final change to § 600.5(a)(5) adds
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 continuously 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
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
reported under the redesignated OMB
Control Number 1845–0012.
Section 668.14(b)(31)—Institutional
Requirements for Teach-Outs/Eligibility
and Certification Procedures
The final regulations in
§ 668.14(b)(31) 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 final 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 final § 668.18 of the regulations
include the general requirements that an
institution may not deny readmission to
a servicemember, but must readmit the

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Federal Register / Vol. 74, No. 208 / Thursday, October 29, 2009 / Rules and Regulations
servicemember with the same academic
status as when the student was last
admitted to the institution. The final
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 final
regulations specify that the institution
must promptly readmit a student, and
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 final
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.
The final regulations 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
intent to return to the institution.
However, such notices do 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 U.S. 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 do not count against the period
of uniformed service which is limited to
the five years.
The final regulations list the
documentation that supports the
institution’s determination for
readmission that a student must submit
with an application for readmission.
The final regulations make clear that the
types of documentation available or
necessary will vary from case to case.
The final regulations list the
circumstances that a student’s eligibility
for readmission to an institution would
be terminated.
We estimate that the final changes
will increase burden for students by 384
hours and for institutions by 1,129

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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 final regulations in § 668.28(a)
implement the statutory provisions
relating to counting revenue from nontitle IV eligible programs.
Regarding institutional loans for
which a net present value (NPV) would
be calculated, the final regulations
establish that institutional loans 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 final regulations allow
institutions to count the excess amount
on a payment-period basis.
We estimate that the final regulations
will increase burden for institutions;
however, these final 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 final regulation in § 668.28(b)
defines the NPV as the sum of the
discounted cash flows. Appendix C
illustrates how an institution calculates
its 90/10 revenue percentage.
The final 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 final 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 final regulations in § 668.28(c)
removes all of the 90/10 provisions from
34 CFR 600.5 and relocates the amended
provisions to subpart B of part 668. The
final 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

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satisfy the 90/10 requirement, the final
regulations require the institution to
notify the Department no later than 45
days after the end of its fiscal year that
it failed to satisfy the 90/10
requirement. In keeping with
provisional certification requirements
the current regulations are amended by
adding final 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 final 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 final 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 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 final 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 final regulations in § 668.43(a)
amend 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 is allowed to determine
what a ‘‘plan’’ is, including when a plan
becomes a plan.
We estimate that the final regulations
will increase burden for institutions by
968 hours in OMB Control Number
1845–0022.
Sections 668.14(b) and 668.43(a)—Peerto-Peer File Sharing/Copyrighted
Material
Section 668.14(b)(30)—Program
Participation Agreement (PPA)
The final 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

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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 final 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 final regulations require 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 final regulations 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 final 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 final 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,
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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 final 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 final 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
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 final 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 final 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).

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The institution reports 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 final 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 final 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 final
regulations 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 final 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 final 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 final language clarifies 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 final regulations
will increase burden for institutions by
1,424 hours in OMB Control Number
1845–0022.
Section 668.46(g)—Emergency Response
and Evacuation Procedures
The final regulations outline the
elements that an institution must
include in its statement of policy

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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
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 required.
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 final regulations
will increase burden for institutions by
11,390 hours in OMB Control Number
1845–0022.
Missing Student Procedure

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Section 668.41(a)—Definition of OnCampus Student Housing Facility
The final regulations in § 668.41(a)
would add a definition of the term oncampus student housing facility to mean
a dormitory or other residential facility
for students that is located on an
institution’s campus.
The final definition is added to clarify
what is meant by on-campus student
housing facility and to link the meaning
of ‘‘on-campus’’ to the current
regulatory definition of campus in
§ 668.46(a), which is used for crime
reporting under § 668.46(c). The final
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

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with this section of the regulations as
reported under OMB Control Number
1845–0004.
Section 668.46(b)—Annual Security
Report
The final regulations in § 668.46(b)
require an institution to include its
missing student notification policy and
procedures in its annual security report.
This is required beginning with the
annual security report distributed by
October 1, 2010.
We estimate that the final 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 final regulations in § 668.46(h)
implement the new 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 final regulations further require
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 final 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.

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We estimate that the final 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 final 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 final regulations 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.
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 final 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 final regulations require an
institution to report to the public, the
statistics that it submits to the
Department in its annual fire safety
report. The institution must 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 final 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

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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 final regulations 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 (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 for the public.
These final 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
final § 668.49(b).
We estimate that the final regulations
will increase burden for institutions by
7,283 hours in OMB Control Number
1845–NEW3.
Financial Assistance for Students With
Intellectual Disabilities

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Section 600.5—Proprietary Institution of
Higher Education
The final regulations in
§ 600.5(a)(5)(i)(B)(2)(ii) define 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. This 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
final change in the regulations.
Section 668.8—Eligible Program
The final regulations in § 668.8(n)
define a comprehensive transition and
postsecondary program as an eligible
program when it is approved by the
Secretary. The final 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 final change in the regulations.

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Section 668.232—Program Eligibility
The final regulations require an
institution that wishes to provide a
comprehensive transition and
postsecondary program to apply and
receive approval from the Secretary. The
final 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 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 final regulations
will increase burden for institutions by
66 hours in OMB Control Number 1845–
NEW4.
Section 668.233—Student Eligibility
The final 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 LEA that the student is or was eligible
for FAPE under the IDEA. If the FAPE
record does not indicate that the student
has an intellectual disability, the
institution must obtain documentation
from another source that identifies the
intellectual disability.
We estimate that the final regulations
will increase burden for institutions by
768 hours in OMB Control Number
1845–NEW4.

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 final 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 final regulations in
§ 675.16(b)(1)(ii) and (b)(2), amend the
FWS regulations 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 increases to not
more than $200. Second, the FWS
provision that allows an institution to
pay for prior award year charges of $100
or more is 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
Section 686.41—Period of Suspension
The final 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 final 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 668.43(a)(7)—Institutional
Information

Section 686.42—Discharge of
Agreement To Serve

The final regulations change the
phrase ‘‘any special facilities and
services’’ to ‘‘the services and facilities,’’
and replaces the phrase ‘‘disabled
students’’ with ‘‘students with
disabilities.’’ The final changes also

The final 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.

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Federal Register / Vol. 74, No. 208 / Thursday, October 29, 2009 / Rules and Regulations
To obtain the discharge, the recipient
(or his or her representative) is 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 U.S. 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 is
responsible for fulfilling any teaching
service obligation that is not discharged.
We estimate that the final 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

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Section 690.67(a)—Student Eligibility
for a Second Scheduled Award
The final regulations amend
§ 690.67(a) to provide that a student is
eligible for a second Scheduled Award
if the student is enrolled for credit or
clock hours attributable to the student’s
second academic year in the award year,
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 regulations will
increase burden for institutions by
47,432 hours in OMB Control Number
1845–NEW5.
Section 690.67(b)—Transfer Students
The final regulations in § 690.67(b)
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

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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 final regulations
will increase burden for institutions by
14,400 hours in OMB Control Number
1845–NEW5.
Section 690.67(c)—Special
Circumstances
The final regulations in § 690.67(c)
provide that in a payment period where
there is insufficient remaining eligibility
from the first Scheduled Award to make
full payment for the payment period, 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 is 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.
Section 690.67(d)—Nonapplicable
Credit or Clock Hours
The final regulation in § 690.97(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 institutions will be
making determinations about the
applicability of AP, IB, or other nonapplicable courses, institutions 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.

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We estimate that the final 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
The final regulation in § 690.64 states
that, if a student is enrolled in a
crossover payment period as a half-time
or less-than-half-time student, the
current requirements generally 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 is required to
reassign the payment to the award year
providing the greater payment within
specified time frames.
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 final regulations
will increase burden for institutions by
33,881 hours in OMB Control Number
1845–NEW5.
Section 690.63(h)—Payment From Two
Scheduled Awards
Under the final 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

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the award year up to the total amount
of the payment for the payment period.
We estimate that the final regulations
will increase burden for institutions by
8,471 hours in OMB Control Number
1845–NEW5.
Part 692 Leveraging Educational
Assistance Partnership Program
Section 692.21(k)—Notification to
Students of LEAP Grant Funding
Sources
The final regulations require that the
State program notify eligible students
that grants under the LEAP Grant
Program are (1) LEAP Grants and (2)
funded by the Federal Government, the
State, and, where applicable, other
contributing partners.
The implementation of the final
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 final
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 ensure 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 692.100—Requirements a State
Must Meet To Receive GAP Funds
The final 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 § 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.

Section 692.101—Requirements That
Must Be Met by a State Partnership
The final 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 final
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 final
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 ensure 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 final 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 final notice
will also include any additional
requirements that the State may require
for receipt of a LEAP Grant under GAP.
The implementation of the final
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 final
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 ensure that
the forms comport with the finalized
requirements. The new forms will be
submitted to OMB for approval under
OMB Control Number 1845–NEW7.
Consistent with this discussion, the
following chart describes the sections of
the final regulations involving
information collections, the information
being collected, and the 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 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).
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).

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

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

668.23(d)(4) .........................
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Under § 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 final
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 final
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 ensure that
the forms comport with the finalized
requirements. The new forms will be
submitted to OMB for approval under
OMB Control Number 1845–NEW7.

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

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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.

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Regulatory section

Information section

Collection

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

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, fulltime 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).
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 student 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).

OMB 1845–0022. There will be an increase in burden
of 968 hours.

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) .......................

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

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

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

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

688.43(a)(7) .........................

686.41, 686.42 .....................

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

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.
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.

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Federal Register / Vol. 74, No. 208 / Thursday, October 29, 2009 / Rules and Regulations

Regulatory section
692.21, 692.100, 692.101,
692.111.

Information section

Collection

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–NEW6. There will be a new collection. A
separate 60-day Federal Register notice will be published to solicit comments.

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.
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.
Note: The official version of this document
is the document published in the Federal
Register. Free Internet access to the official
edition of the Federal Register and the Code
of Federal Regulations is available on GPO
Access at: http://www.gpoaccess.gov/nara/
index.html.
(Catalog of Federal Domestic Assistance
Numbers: 84.063 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.

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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.
34 CFR Part 675

15:40 Oct 28, 2009

34 CFR Part 690
Colleges and universities, Education
of disadvantaged, Grant programs—
education, Reporting and recordkeeping
requirements, Student aid.
34 CFR Part 692
Colleges and universities, Grant
programs—education, Reporting and
recordkeeping requirements, Student
aid.
Dated: October 16, 2009.
Arne Duncan,
Secretary of Education.

For the reasons discussed in the
preamble, the Secretary amends parts
600, 668, 675, 686, 690, and 692 of title
34 of the Code of Federal Regulations as
follows:

■

PART 600—INSTITUTIONAL
ELIGIBILITY UNDER THE HIGHER
EDUCATION ACT OF 1965, AS
AMENDED
1. The authority citation for part 600
continues to read as follows:

■

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

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:
■
■

§ 600.2

Colleges and universities,
Employment, Grant programs—
education, Reporting and recordkeeping
requirements, Student aid.

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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.

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Definitions.

*

*
*
*
*
Educational program: (1) * * *
(i) Leads to an academic, professional,
or vocational degree, or certificate, or

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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))

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

4. Section 600.5 is amended by:
A. Revising paragraph (a)(5).
B. In paragraph (a)(6), adding the
word ‘‘and’’ after the punctuation ‘‘;’’.

■
■
■

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Federal Register / Vol. 74, No. 208 / Thursday, October 29, 2009 / Rules and Regulations
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:

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■

(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:

■
■
■

§ 600.5 Proprietary institution of higher
education.

§ 600.6 Postsecondary vocational
institution.

(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) Has provided a program leading
to a baccalaureate degree in liberal arts,
as defined in paragraph (e) of this
section, continuously 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:
(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.

(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;
*
*
*
*
*

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

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:
■
■

§ 600.32

Eligibility of additional locations.

*

*
*
*
*
(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 and the Secretary has taken
an action to limit, suspend, or terminate
the institution’s participation under
§ 600.41 or subpart G of this part, or has
taken an emergency action 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 in existence 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

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55933

provided under paragraph (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, 1099c, 1141)

PART 668—STUDENT ASSISTANCE
GENERAL PROVISIONS
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. In paragraph (d)(2)(iv)(B), removing
the word ‘‘or’’ that appears after the
punctuation ‘‘;’’.
■ B. In paragraph (d)(3)(v), removing the
punctuation ‘‘.’’ and adding, in its place,
the word ‘‘; or’’.
■ C. Adding paragraph (d)(4).
■ D. Revising paragraph (n).
■ E. Removing the OMB control number
at the end of the section.
The addition and revision read as
follows:
■
■

§ 668.8

Eligible program.

(d) * * *
(4) For purposes of a proprietary
institution of higher education only, is
a program leading to a baccalaureate
degree in liberal arts, as defined in 34
CFR 600.5(e), that—
(i) Is provided by an institution that
is accredited by a recognized regional
accrediting agency or association, and
has continuously held such
accreditation since October 1, 2007, or
earlier; and
(ii) The institution has provided
continuously since January 1, 2009.
*
*
*
*
*
(n) For Title IV, HEA program
purposes, eligible program includes a

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direct assessment program approved by
the Secretary under § 668.10 and a
comprehensive transition and
postsecondary program approved by the
Secretary under § 668.232.
*
*
*
*
*
■ 9. Section 668.13(c)(1) is revised to
read as follows:
§ 668.13

Certification procedures.

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*

*
*
*
*
(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 and subpart L of this part
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 at the start of a fiscal year
after it did not derive at least 10 percent
of its revenue for its preceding 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.

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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
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

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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.
(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

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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
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; and
(E)(1) If the student is readmitted to
the same program, for the first academic
year in which the student returns,
assessing—
(i) The tuition and fee charges that the
student was or would have been
assessed for the academic year during
which the student left the institution; or
(ii) Up to the amount of tuition and
fee charges that other students in the
program are assessed for that academic
year, if veterans’ education benefits, as
defined in section 480(c) of the HEA, or
other servicemember education benefits,
will pay the amount in excess of the
tuition and fee charges assessed for the
academic year in 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 tuition and fee charges that
other students in the program are
assessed for that academic year.
(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 at no extra
cost to the student 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 to the
student and allowing the student to
retake a pretest at no extra cost to the
student.
(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;

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(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 when considered in light of the
overall financial resources of the
institution and the impact otherwise of
such action on the operation of the
institution.
(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 for the
period of enrollment during which the
student resumes attendance, and
continuing so long as the institution is
unable to comply with such
requirements through other means.
(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

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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
(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, not later than 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

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(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;
(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);

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(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
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.

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(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
service in the uniformed services
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. Section 668.23 is amended by
revising 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

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accordance with § 668.28. The
institution must also report in the
footnote the dollar amount of the
numerator and denominator of its 90/10
ratio as well as the individual revenue
amounts identified in section 2 of
appendix C to subpart B of part 668.
*
*
*
*
*
■ 13. Section 668.28 is added to subpart
B of part 668 to read as follows:

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§ 668.28

Non-title IV revenue (90/10).

(a) General. (1) Calculating the
revenue percentage. A proprietary
institution meets 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.
(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

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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
special tax treatment under the Internal
Revenue Code of 1986; or
(iv) Institutional scholarships that
meet the requirements in 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 and
credited in full to the students’ accounts
at the institution 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

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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
payment period under the loan limit in
effect on the day prior to enactment of
the ECASLA is included and deemed to
be 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
other 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. If any funds from the
loan disbursement used in the return
calculation under § 668.22 were counted
as non-title IV revenue under paragraph
(a)(6) of this section, the amount of Title
IV, HEA program funds refunded or
returned under § 668.22 is considered to
consist of pre-ECASLA loan amounts
and loan amounts in excess of the loan
limits prior to ECASLA in the same
proportion to the loan disbursement; 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—

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(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
(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

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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

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(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:

■

BILLING CODE 4000–01–P

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Federal Register / Vol. 74, No. 208 / Thursday, October 29, 2009 / Rules and Regulations

BILLING CODE 4000–01–C

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

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■

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paragraph and adding, in its place, the
punctuation ‘‘.’’.
■ 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

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(m) of this section or meets the
requirement in paragraph (n) of this
section as follows:
*
*
*
*
*
(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, the definition of oncampus student housing facility.
■ 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 addition and revisions read as
follows:
■
■

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§ 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
institution’s campus, as defined in
§ 668.46(a).
*
*
*
*
*
(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.
(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

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(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
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

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55943

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 punctuation ‘‘;’’.
■ H. Adding paragraph (a)(10).
■ I. Adding paragraph (a)(11).
■ J. In paragraph (b), removing the
words ‘‘, upon request,’’.
The additions and revision read as
follows:
§ 668.43

Institutional information.

(a) * * *
(5) * * *
(iv) Any plans by the institution for
improving the academic program of the
institution, upon a determination by the
institution that such a plan exists;
*
*
*
*
*
(7) A description of the services and
facilities available to students with

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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; and
(11) A description of the transfer of
credit policies established by the
institution which must include a
statement of the institution’s current
transfer of credit policies that includes,
at a minimum—
(i) Any established criteria the
institution uses regarding the transfer of
credit earned at another institution; and
(ii) A list of institutions with which
the institution has established an
articulation agreement.
*
*
*
*
*
■ 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.

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(ii) An institution not covered by the
provisions of paragraph (a)(3)(i) of this
section 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 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

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disclose or report with confidence and
confidentiality.
(ii) With respect to the requirement in
paragraph (a)(6)(i) of this section to
disaggregate the completion or
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 for 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

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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
due to their service in the Armed
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)
(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. Adding paragraphs (b)(13) and
(b)(14).
■ C. Revising paragraph (c)(3).
■ D. Revising the heading for paragraph
(e).
■ E. Adding paragraph (e)(3).
■ F. Adding paragraph (g).
■ G. Adding paragraph (h).
The additions and revisions read as
follows:

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■
■

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§ 668.46 Institutional security policies and
crime statistics.

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

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55945

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—
(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

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enforcement agency that has jurisdiction
in the area;
(iii) Contain an option for each
student to identify a contact person or
persons whom the institution shall
notify within 24 hours of the
determination that the student is
missing, if the student has been
determined 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 within 24
hours of the determination that the
student is missing, in addition to
notifying any additional contact person
designated by the student; and
(vi) Advise students that, the
institution will notify the local law
enforcement agency within 24 hours of
the determination that the student is
missing, unless the local law
enforcement agency was the entity that
made the determination 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 that the student
is missing;
(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 that the
student is missing; 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 within 24 hours that the
student is missing.
*
*
*
*
*
■ 20. Section 668.49 is added to subpart
D of part 668 to read as follows:
§ 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

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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 the fire. The term ‘‘person’’
may include students, employees,
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.

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(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 and employees.
In these policies, the institution 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 persons who
received fire-related injuries that
resulted in treatment at a medical
facility, including at an on-campus
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)

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

21. 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,’’ by:
■ i. Removing the definition of Weapon
Law Violations;
■ ii. Adding a new definition of
Weapons: Carrying, Possessing, Etc.;
and
■ iii. 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

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*

*

*

*

*

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

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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 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.
■ 22. Section 668.161 is amended by
revising the section heading and
paragraph (a)(4) to read as follows:
§ 668.161 Scope and purpose (cash
management rules).

(a) * * *
(4) An institution must follow the
disbursement procedures in 34 CFR

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55947

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]

23. 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’’.
■ 24. 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 Scope and purpose.
668.231 Definitions.
668.232 Program eligibility.
668.233 Student eligibility.

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:
(a) 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

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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.
(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.
(b) 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)

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§ 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;

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(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.
(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

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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
25. The authority citation for part 675
is revised to read as follows:

■

Authority: 20 U.S.C. 1070g, 1094; 42 U.S.C.
2751–2756b; unless otherwise noted.
§ 675.2

[Amended]

26. 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,’’.
■ 27. 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.

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Federal Register / Vol. 74, No. 208 / Thursday, October 29, 2009 / Rules and Regulations
(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
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 occurred on the account.
(d) Student authorizations. (1) Except
for the noncash contributions allowed
under paragraph (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

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(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.
(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.

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55949

(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)

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

■
■
■
■

§ 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;

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(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
(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)).

(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-learningservice 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—
*
*
*
*
*

(Authority: 20 U.S.C. 1095, 1096; 42 U.S.C.
2753, 2755, 2756, 2756b)

§ 675.43

29. 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

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§ 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).
*
*
*
*
*
■ 30. 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:
§ 675.41

*

*

Special definitions.

*

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*

15:40 Oct 28, 2009

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[Amended]

32. 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.

*

[Amended]

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

■

§ 675.45

[Amended]

33. 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’’.
PART 686—TEACHER EDUCATION
ASSISTANCE FOR COLLEGE AND
HIGHER EDUCATION (TEACH) GRANT
PROGRAM
34. The authority citation for part 686
continues to read as follows:

■

Authority: 20 U.S.C. 1070g, et seq., unless
otherwise noted.
§ 686.12

[Amended]

35. Section 686.12(c)(1) is amended
by adding the words ‘‘, a suspension
approved under § 686.41(a)(2), or a

■

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military discharge granted under
§ 686.42(c)(2)’’ after the words ‘‘teaching
service’’.
■ 36. 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
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)

*

*
*
*
*
37. 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—

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(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—
(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
38. The authority citation for part 690
continues to read as follows:

■

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

39. Section 690.6 is amended by:
A. Revising the section heading.
B. Adding paragraph (e).
The revision and addition read as
follows:

■
■
■

§ 690.6

Duration of student eligibility.

*

*
*
*
*
(e) If a student receives a Federal Pell
Grant for the first time on or after July

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1, 2008, the student may receive no
more than nine Scheduled Awards.
*
*
*
*
*
■ 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.

*

*
*
*
*
(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.
(Approved by the Office of Management and
Budget under control number 1845–NEW5)
(Authority: 20 U.S.C. 1070a)

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) 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;
(2) The institution must reassign the
payment to the award year providing
the greater payment if 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—
(i) Subsequent to the initial
calculation of the student’s payment for
the payment period; and

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(ii) Not later than the deadline date
for the first award year that the
Secretary establishes through
publication in the Federal Register for
each award year; and
(3) The institution may reassign the
payment to the award year providing
the greater payment if 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—
(i) Subsequent to the deadline date
established in paragraph (b)(2) of this
section; and
(ii) Not later than the deadline date
for the first award year for
administrative relief based on unusual
circumstances that the Secretary
establishes through publication in the
Federal Register for each award year;
(c) 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
(d) 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:

■

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

(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) Is enrolled for credit or clock
hours that are attributable to the
student’s second 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. (1) Options. If a
student transfers to an institution during
an award year, the institution must
determine the credit or clock hours
earned in the award year at the other
institutions in accordance with
paragraph (b)(2) or (3) of this section.
(2) Assumption method. (i) The
institution may 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
(ii) If less than the first Scheduled
Award has been disbursed at a prior

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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—
(A) 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
(B) 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.
(3) Hours-earned method. (i) If the
institution has information concerning
the credit or clock hours earned by a
student while attending other
institutions, the institution may
determine the credit or clock hours
actually earned at other institutions.
(ii) To make a determination under
paragraph (b)(3)(i) of this section, the
institution must have information that—
(A) Includes the time periods when
the credit or clock hours were earned;
and
(B) Does not include nonapplicable
credit or clock hours described in
paragraph (d) of this section.
(iii) An institution must attribute to
the current award year any credit or
clock hours earned at other institutions
that were earned in a payment period
that it determines was scheduled to
occur in the prior award year and the
current award year.
(4) Receipt of additional information.
(i) If an institution receives additional
information concerning, for paragraph
(b)(2) of this section, Federal Pell Grant
disbursements or, for paragraph (b)(3) of
this section, credit or clock hours
earned at other institutions and related
information, subsequent to a prior
payment period in which the institution
disbursed a payment of a second
Scheduled Award in the award year
based on the application of paragraph
(b)(2) or (3) of this section, the
institution is not required to apply the
information to the prior payment
period.
(c) Special circumstances. (1) In a
payment period in which there is
insufficient remaining eligibility from a
student’s first Scheduled Award to
provide a full payment for the payment
period, the financial aid administrator at
the institution may waive the
requirement in paragraph (a)(1) of this
section, if the financial aid
administrator—

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(i) Determines that the student due to
circumstances beyond the student’s
control was unable to complete the
credit or clock hours of the first
academic year that are necessary to be
enrolling for credit or clock hours that
are attributable to the second academic
year; 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
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)

PART 692—LEVERAGING
EDUCATIONAL ASSISTANCE
PARTNERSHIP PROGRAM
43. The authority citation for part 692
is revised to read as follows:

■

Authority: 20 U.S.C. 1070c–1070c–4,
unless otherwise noted.
§ 692.10

[Amended]

44. 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.
■ 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’’
■ 45. Section 692.21 is amended by:
■ A. In paragraph (c), removing the
figure ‘‘$5,000’’ and adding, in its place,
■
■

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

*

*
*
*
*
46. 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)

47. Subpart C, consisting of §§ 692.90
through 692.130 and Appendix A, 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?
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?

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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?

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

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)

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§ 692.93 Who is eligible to participate in
the GAP Program?

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§ 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)

(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
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

VerDate Nov<24>2008

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.

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

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55953

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
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;

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(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)

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§ 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
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.

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(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?
§ 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
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.
(4) For fiscal year 2011, the prior
fiscal year allotment to a State for
purposes of paragraph (a)(3) of this
section shall include any fiscal year
2010 allotment made to that State under
subpart B of this part.
(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

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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
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.

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(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.
(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
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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)
§ 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
education; and
(D) Is considered to be estimated
financial assistance under 34 CFR
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—

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(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;
(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

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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.

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(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

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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
recommendations that it deems
appropriate for the Secretary’s
consideration.
(Authority: 20 U.S.C. 1070c–3a)
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