NPRM Publication

Thursday,
August 6, 2009

Part IV

Department of
Education

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34 CFR Parts 600 and 602
Institutional Eligibility Under the Higher
Education Act of 1965, as Amended, and
the Secretary’s Recognition of Accrediting
Agencies; Proposed Rule

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Federal Register / Vol. 74, No. 150 / Thursday, August 6, 2009 / Proposed Rules

DEPARTMENT OF EDUCATION
34 CFR Parts 600 and 602
RIN 1840–AD00
[Docket ID ED–2009–OPE–0009]

Institutional Eligibility Under the
Higher Education Act of 1965, as
Amended, and the Secretary’s
Recognition of Accrediting Agencies
AGENCY: Office of Postsecondary
Education, Department of Education.
ACTION: Notice of proposed rulemaking.

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SUMMARY: The Secretary proposes to
amend the regulations in 34 CFR part
600, governing institutional eligibility,
and part 602, governing the Secretary’s
recognition of accrediting agencies. The
Secretary is amending these regulations
to implement changes to the Higher
Education Act of 1965, as amended
(HEA), resulting from enactment of the
Higher Education Reconciliation Act of
2005 (HERA), Public Law 109–171, and
the Higher Education Opportunity Act
(HEOA), Public Law 110–315, and to
clarify, improve, and update the current
regulations.
DATES: We must receive your comments
on or before September 8, 2009.
ADDRESSES: Submit your comments
through the Federal eRulemaking Portal
or via postal mail, commercial delivery,
or hand delivery. We will not accept
comments by fax or by e-mail. Please
submit your comments only one time, in
order to ensure that we do not receive
duplicate copies. In addition, please
include the Docket ID at the top of your
comments.
• Federal eRulemaking Portal: Go to
www.regulations.gov to submit your
comments electronically. Information
on using Regulations.gov, including
instructions for accessing agency
documents, submitting comments, and
viewing the docket, is available on the
site under ‘‘How to Use This Site.’’
• Postal Mail, Commercial Delivery,
or Hand Delivery. If you mail or deliver
your comments about these proposed
regulations, address them to Ann
Clough, U.S. Department of Education,
1990 K Street, NW., room 8043,
Washington, DC 20006–8542.

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

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FOR FURTHER INFORMATION CONTACT: Ann
Clough. Telephone: (202) 502–7484 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 may
obtain this document in an accessible
format (e.g., braille, large print,
audiotape, or computer diskette) on
request to the contact person listed
under FOR FURTHER INFORMATION
CONTACT.
SUPPLEMENTARY INFORMATION:

Invitation To Comment
We invite you to submit comments
regarding these proposed regulations.
To ensure that your comments have
maximum effect in developing the final
regulations, we urge you to identify
clearly the specific section or sections of
the proposed regulations that each of
your comments addresses and to arrange
your comments in the same order as the
proposed regulations.
We invite you to assist us in
complying with the specific
requirements of Executive Order 12866
and its overall requirement of reducing
regulatory burden that might result from
these proposed regulations. Please let us
know of any further opportunities we
should take to reduce potential costs or
increase potential benefits while
preserving the effective and efficient
administration of the program.
During and after the comment period,
you may inspect all public comments
about these proposed regulations by
accessing Regulations.gov. You may also
inspect the comments, in person, in
room 8043, 1990 K Street, NW.,
Washington, DC, between the hours of
8:30 a.m. and 4 p.m., Eastern time,
Monday through Friday of each week
except Federal holidays.
Assistance to Individuals With
Disabilities in Reviewing the
Rulemaking Record
On request, we will supply an
appropriate aid, such as a reader or
print magnifier, to an individual with a
disability who needs assistance to
review the comments or other
documents in the public rulemaking
record for these proposed regulations. If
you want to schedule an appointment
for this type of aid, please contact the
person listed under FOR FURTHER
INFORMATION CONTACT.
Negotiated Rulemaking
Section 492 of the HEA requires the
Secretary, before publishing any
proposed regulations for programs
authorized by title IV of the HEA (title

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IV, HEA programs), to obtain public
involvement in the development of the
proposed regulations. After obtaining
advice and recommendations from
individuals and representatives of
groups involved in, or affected by, the
Federal recognition of accrediting
agencies, the Secretary must subject the
proposed regulations for the title IV,
HEA programs to a negotiated
rulemaking process. All proposed
regulations that the Department
publishes must conform to final
agreements resulting from that process
unless the Secretary reopens the process
or provides a written explanation to the
participants in that process stating why
the Secretary has decided to depart from
the agreements. Further information on
the negotiated rulemaking process may
be found at: www.ed.gov/policy/
highered/leg/hea08/index.html.
On September 8, 2008, the
Department published a notice in the
Federal Register (73 FR 51990)
announcing our intent to establish
negotiated rulemaking committees to
develop proposed regulations to (1)
implement the changes made to the
HEA by the HEOA, and (2) possibly
address the provision added to section
207(c) of the HEA by the HEOA that
requires the Secretary to submit to a
negotiated rulemaking process any
regulations the Secretary chooses to
develop under amended section
207(b)(2) of the HEA, regarding the
prohibition on a teacher preparation
program from which the State has
withdrawn approval or terminated
financial support from accepting or
enrolling any student who received title
IV aid.
On December 31, 2008, the
Department published a notice in the
Federal Register (73 FR 80314)
announcing our intent to establish five
negotiated rulemaking committees to
prepare proposed regulations. The
notice indicated that no requests from
the public were received to negotiate the
provision added to section 207(c) of the
HEA. The five committees that were
established were: (1) A committee on
lender and general loan issues (Loans
Team I); (2) a committee on schoolbased loan issues (Loans Team II); (3) a
committee on accreditation issues; (4) a
committee on discretionary grant
programs; and (5) a committee on
general and non-loan programmatic
issues. The notice informed the public
that, due to the large volume of changes
made by the HEOA that needed to be
implemented through negotiated
rulemaking, not all provisions would be
addressed during this round of
committee meetings. The notice
requested nominations of individuals

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Federal Register / Vol. 74, No. 150 / Thursday, August 6, 2009 / Proposed Rules
for membership on the committees who
could represent the interests
significantly affected by the proposed
regulations and had demonstrated
expertise or experience in the relevant
subjects under negotiation. The
Accreditation Committee (‘‘the
Committee’’) met in three sessions to
develop proposed regulations: session 1,
March 4–6, 2009; session 2, April 21–
23, 2009; and session 3, May 18–19,
2009. This notice of proposed
rulemaking (NPRM) proposes
regulations relating to accreditation that
were discussed by the Committee.
The Department developed a list of
proposed regulatory changes from
advice and recommendations submitted
by individuals and organizations in
testimony to the Department in a series
of six public hearings held on:
• September 19, 2008, at Texas
Christian University in Fort Worth,
Texas.
• September 29, 2008, at the
University of Rhode Island in
Providence, Rhode Island.
• October 2, 2008, at the Pepperdine
University in Malibu, California.
• October 6, 2008, at Johnson C.
Smith University in Charlotte, North
Carolina.
• October 8, 2008, at the U.S.
Department of Education in
Washington, DC.
• October 15, 2008, at Cuyahoga
Community College in Warrensville
Heights, Ohio.
In addition, the Department accepted
written comments on possible
regulatory changes submitted directly to
the Department by interested parties
and organizations. All regional meetings
and a summary of all comments
received orally and in writing are posted
as background material in the docket
and may also be accessed at
www.ed.gov/HEOA. Staff within the
Department also identified issues for
discussion and negotiation.
The Accreditation Committee was
made up of the following members:
• Michale McComis, Accrediting
Commission of Career Schools and
Colleges of Technology, and Roger
Williams (alternate), Accrediting
Council for Continuing Education and
Training.
• Ralph Wolff, Accrediting
Commission for Senior Colleges and
Universities, Western Association of
Schools and Colleges, and Belle
Wheelan (alternate), Commission on
Colleges, Southern Association of
Colleges and Schools.
• Sharon Tanner, The National
League for Nursing Accrediting
Commission, and Betty Horton

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(alternate), Association of Specialized
and Professional Accreditors.
• Marshall Hill, Nebraska
Coordinating Commission for
Postsecondary Education, and Kathryn
Dodge (alternate), New Hampshire
Postsecondary Education Commission.
• Alan Mabe, University of North
Carolina, and Mary Anne Hanner
(alternate), Eastern Illinois University.
• Sonia Jacobson, Georgetown
University, and Susan Hattan
(alternate), National Association of
Independent Colleges and Universities.
• Ronald Blumenthal, Kaplan Higher
Education, and William Clohan
(alternate), DeVry Inc.
• Linda Michalowski, California
Community Colleges, and Jim Hermes
(alternate), American Association of
Community Colleges.
• Michael Offerman, Capella
Education Company, and Muriel Oaks
(alternate), Washington State University.
• Phyllis Worthy Dawkins, Johnson
C. Smith University, and Jose´ Jaime
Rivera (alternate), University of the
Sacred Heart.
• Kendal Nystedt, University of
Arizona, and Jacob Littler (alternate),
Mesabi Range College.
• Terry Hartle, American Council on
Education, and Becky Timmons
(alternate), American Council on
Education.
• Kay Gilcher, U.S. Department of
Education.
The Committee’s protocols provided
that the Committee would operate by
consensus, meaning there must be no
dissent by any member in order for the
Committee to be considered to have
reached agreement. Under the protocols,
if the Committee reaches final
consensus on all issues, the Department
will use the consensus-based language
in the proposed regulations and
members of the Committee and the
organizations whom they represent will
refrain from commenting negatively on
the package, except where permitted by
the agreed-upon protocols.
During its meetings, the Committee
reviewed and discussed drafts of
proposed regulations. At the final
meeting in May 2009, the Committee
reached consensus on all of the
proposed regulations in this NPRM.
More information on the work of this
committee may be found at:
www.ed.gov/policy/highered/reg/
hearulemaking/2009/
accreditation.html.
Summary of Proposed Changes
This NPRM reflects the Department’s
proposals to revise current regulations
and adopt new regulations governing
the recognition of accrediting agencies

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as a result of the following changes
made to the HEA by the HERA and the
HEOA:
• The addition of a definition of
‘‘distance education’’ and separate
references to distance education and
correspondence education. (See section
103 of the HEA).
• The addition of an eligible program
under title IV of the HEA—an
instructional program that uses direct
assessment of a student’s learning in
lieu of credit or clock hours. (See
section 418(b)(4) of the HEA).
• The addition of a definition of a
‘‘teach-out plan’’ and a new provision
that agencies must require the
institutions they accredit to submit a
teach-out plan to the agency under
certain circumstances. (See sections
487(f)(2) and 496(c)(3) of the HEA).
• The addition of several new
provisions pertaining to distance
education and correspondence
education. (See sections 496(a)(4)(B)
and 496(q) of the HEA).
• Expanded due process requirements
for agencies. (See section 496(a)(6) of
the HEA).
• The addition of a requirement that
accrediting agencies confirm that
institutions have transfer of credit
policies. (See section 496(c)(9) of the
HEA).
• The addition of a requirement that
accreditation team members be welltrained and knowledgeable about their
responsibilities regarding distance
education. (See section 496(c)(1) of the
HEA).
• The addition of requirements that
agencies monitor enrollment growth at
institutions. (See sections 496(c)(2) and
496(q) of the HEA).
• Changes to agency disclosure
requirements. (See section 496(c)(7) of
the HEA).
The NPRM also reflects changes to
existing regulations governing
institutional eligibility by revising the
definition of ‘‘correspondence course’’
to be compatible with the new
definition of ‘‘correspondence
education’’ in the accrediting agency
recognition regulations.
Further, the NPRM reflects changes to
existing regulations governing the
process for recognizing accrediting
agencies, including the following:
• The addition of a definition of
‘‘recognition’’.
• Modifications to record-keeping
and confidentiality requirements.
• Combining current subparts C and
D into one subpart in order to
streamline procedures for agency
review; establishing the senior
Department official as the deciding
official, with appeal to the Secretary;

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and providing a list of the various laws
regarding public requests for
information with which the Secretary
must comply.
• Additions and modifications to
existing requirements related to
substantive change.
Significant Proposed Regulations
We group major issues according to
subject, with appropriate sections of the
proposed regulations referenced in
parentheses.
Definitions

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Correspondence Course (§ 600.2)
Statute: There is no definition of
‘‘correspondence course’’ in the HEA.
Institutional eligibility requirements in
section 102(a)(3) of the HEA generally
provide that institutions offering more
than 50 percent of their courses by
correspondence, or enrolling 50 percent
or more of their students in
correspondence courses, are ineligible
for title IV, HEA program assistance.
Current Regulations: Current § 600.2
contains a definition of
‘‘correspondence course’’. The
definition describes how a
correspondence course is delivered to
students who are not physically
attending classes at the institution. It
does not address the nature of the
pedagogy.
Proposed Regulations: The proposed
regulations would amend the definition
of ‘‘correspondence course’’ in § 600.2
to draw a clearer contrast with distance
education, defined in section 103 of the
HEA. The proposed definition addresses
pedagogy by noting that the interaction
between the instructor and the student
in a correspondence course is limited, is
not regular and substantive, and is
primarily initiated by the student. The
proposed definition also notes that a
correspondence course is typically
designed so that a student proceeds
through the course at the student’s own
pace.
Reasons: Because of the different
statutory treatment of distance
education and correspondence courses,
it is critical to differentiate between the
two delivery modes. A definition of
correspondence course that focuses
exclusively on the exchange of materials
between the institution and a student
does not draw a useful distinction
because both distance education and
correspondence courses are delivered to
students who are separated from the
instructor. Given that the primary
distinguishing factor between the two is
the nature of the interaction between the
instructor and the student, the
definition must include information

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about this characteristic of the
pedagogy, or instructional model.
Distance Education (§§ 600.2; 602.3)
Statute: Section 103 of the HEA
defines ‘‘distance education’’ as
education that uses one or more
technologies to deliver education to
students who are separated from the
instructor and to support regular and
substantive interaction between the
students and the instructor, either
synchronously or asynchronously. The
definition contains a list of
technologies.
Current Regulations: Current
regulations in § 600.2 do not include a
definition of ‘‘distance education’’.
However, current regulations in § 600.2
include a definition of
‘‘telecommunications course’’, which
was previously used in the HEA and
corresponding regulations. This
definition of ‘‘telecommunications
course’’ is essentially the same as the
new definition of ‘‘distance education’’
in the HEA, as amended by the HEOA.
Current regulations in § 602.3 include
a definition of ‘‘distance education’’ that
encompasses correspondence study.
Proposed Regulations: The proposed
regulations would add the statutory
definition of ‘‘distance education’’ in
both §§ 600.2 and 602.3. The definition
would state that ‘‘distance education’’
means education that uses one or more
technologies to deliver instruction to
students who are separated from the
instructor and to support regular and
substantive interaction between the
students and the instructor, either
synchronously or asynchronously. The
technologies may include the internet;
one-way and two-way transmissions
through open broadcast, closed circuit,
cable, microwave, broadband lines, fiber
optics, satellite, or wireless
communications devices; audio
conferencing; or video cassettes, DVDs,
and CD–ROMs, if the cassettes, DVDs, or
CD–ROMs are used in a course in
conjunction with any of the other
technologies listed.
Reasons: The proposed regulations
reflect changes made by the HEOA.
Compliance Report (§ 602.3)
Statute: There is no definition of
‘‘compliance report’’ in the HEA. Under
section 496(l) of the HEA, to continue to
be recognized by the Secretary, an
agency that has been determined by the
Secretary to be out of compliance with
any of the criteria for recognition, or to
have failed to apply those criteria
effectively, may be given no more than
12 months to come into compliance,
except upon grant of an extension for
good cause shown.

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Current Regulations: ‘‘Compliance
report’’ is not used in the current
regulations in part 602 governing the
Secretary’s recognition of accrediting
agencies.
Proposed Regulations: The proposed
regulations would add a definition of
‘‘compliance report’’ in § 602.3. A
‘‘compliance report’’ would be defined
as a written report that the Department
requires an agency to file to demonstrate
that the agency has addressed
deficiencies specified in a decision
letter from the senior Department
official or the Secretary.
Reasons: The proposed regulations
would combine former subparts C and
D, which detail the Secretary’s process
for recognizing accrediting agencies,
and the process whereby an accrediting
agency’s recognition could be limited,
suspended, or terminated, into a single
subpart C. The proposed regulations in
subpart C would allow agencies to be
out of compliance for no more than 12
months, after which time a decision on
recognition would be made on the basis
of a compliance report. The proposed
definition of ‘‘compliance report’’ in
§ 602.3 describes this key component of
the recognition process.
Correspondence Education (§ 602.3)
Statute: There is no definition of
‘‘correspondence education’’ in the
HEA. Section 496(a)(4)(B) and (q) of the
HEA includes references to
correspondence education alongside
references to distance education.
Section 496(a)(4)(B) provides that if an
agency has, or seeks to include, within
its scope of recognition the evaluation of
the quality of institutions or programs
offering distance education or
correspondence education, it must meet
various requirements, which are
specified in that section. It further
provides that a recognized agency may
add distance education or
correspondence education to its scope
of recognition by providing written
notice to the Secretary. Section 496(q) of
the HEA provides that the Secretary
must require a review at the next
available National Advisory Committee
on Institutional Quality and Integrity
(‘‘NACIQI’’ or ‘‘Advisory Committee’’)
meeting of a change in scope of an
accrediting agency that expanded its
scope of recognition to include distance
education or correspondence education
by written notice to the Secretary, if the
enrollment of an institution accredited
by that agency that offers distance
education or correspondence education
increases by 50 percent or more within
any one institutional fiscal year.
Current Regulations: Current
regulations in § 602.3 include a

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definition of ‘‘distance education’’ that
encompasses correspondence study as
well as education delivered to students
using one or more technologies
specified in the definition.
Proposed Regulations: The proposed
regulations would add a definition of
‘‘correspondence education’’ in § 602.3.
The proposed definition would clearly
distinguish between correspondence
education and distance education,
particularly with respect to the nature of
the interaction between the instructor
and the students. ‘‘Correspondence
education’’ would be defined as
education provided through one or more
courses by an institution under which
the institution provides instructional
materials, by mail or electronic
transmission, including examinations
on the materials, to students who are
separated from the instructor. The
proposed definition would specify that
interaction between the instructor and
the student is limited, is not regular and
substantive, and is primarily initiated
by the student and that correspondence
courses are typically self-paced. The
proposed definition would also specify
that correspondence education is not
distance education.
Reasons: Section 496 of the HEA
refers several times to ‘‘distance
education or correspondence
education’’. For example, the HEA
requires that an agency’s standards
‘‘effectively address the quality of an
institution’s distance education or
correspondence education’’ and that an
agency require ‘‘an institution that offers
distance education or correspondence
education to have processes through
which the institution establishes that
the student who registers in a distance
education or correspondence education
course or program is the same student
who participates in and completes the
program and receives the academic
credit.’’ The separate references to these
two types of education indicate that
they are distinct from one another for
HEA purposes.
The Department originally proposed a
definition of ‘‘correspondence
education’’, adapted from the definition
of ‘‘correspondence course’’ in current
§ 600.2, that included ‘‘home study’’
and described how information is sent
back and forth between the institution
and the student. The non-Federal
negotiators commented that the term
‘‘home study’’ is no longer in general
use. In addition, they stated that the
significant difference between distance
education and correspondence
education is that correspondence
education generally is designed to be
self-paced, with minimal interaction
between the student and the instructor.

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The Department amended the proposed
definition to remove the term ‘‘home
study’’ and to include the concepts
relating to pedagogy or instructional
model.
Designated Federal Official (§ 602.3)
Statute: The HEA does not include a
definition of ‘‘Designated Federal
Official’’. Section 10(e) and (f) of the
Federal Advisory Committee Act
(FACA), 5 U.S.C. Appdx. 1, refers to a
‘‘designated officer or employee of the
Federal Government’’ who has
responsibilities under FACA related to
advisory committee meetings.
Current Regulations: Current
regulations do not include a definition
of ‘‘Designated Federal Official’’.
Proposed Regulations: The proposed
regulations in § 602.3 would define
‘‘Designated Federal Official’’ as the
Federal officer designated under section
10(f) of FACA, 5 U.S.C. Appdx. 1.
Reasons: Section 114(d)(2)(A) of the
HEA authorizes the Chairperson of the
NACIQI to establish the agenda for
Advisory Committee meetings. Prior to
passage of the HEOA, the Chairperson of
NACIQI did not have this role. FACA
requires that a designated officer or
employee of the Federal Government
approve the agenda for an advisory
committee meeting. The proposed
definition of ‘‘Designated Federal
Official’’, which specifies the role of the
Federal officer under FACA, is needed
to clarify that, although the HEA now
authorizes the Chairperson of the
Advisory Committee to establish the
agenda, it must still be approved by the
Federal official designated under FACA.
Direct Assessment Program (§ 602.3)
Statute: Section 481(b)(4) of the HEA
stipulates that for purposes of title IV,
HEA programs, ‘‘eligible program’’
includes an instructional program that
uses direct assessment of student
learning, or recognizes the direct
assessment of student learning by
others, in lieu of credit hours or clock
hours as a measure of student learning.
The assessment must be consistent with
the institution’s or program’s
accreditation. The HEA also provides
that the Secretary will determine
initially whether each program for
which an institution proposes to use
direct assessment is an eligible program.
Current Regulations: There are no
current regulations in part 602 that
reflect direct assessment programs.
Regulations for Federal Student Aid
Programs in 34 CFR 668.10 list the
information an institution must provide
to the Secretary in order to have a direct
assessment program approved as an
eligible program for title IV, HEA

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purposes. 34 CFR 668.10 includes a
requirement that an accrediting agency
review and approve the program for
inclusion in the institution’s grant of
accreditation, and that the agency
evaluate the institution’s claim of the
direct assessment program’s equivalence
in terms of credit or clock hours.
Proposed Regulations: The proposed
regulations would add a definition of
‘‘direct assessment program’’ in § 602.3
that incorporates the language of the
HEA and includes the accrediting
agency role in approving a direct
assessment program for title IV, HEA
purposes, consistent with the
requirements in 34 CFR 668.10. A
‘‘direct assessment program’’ would be
defined as an instructional program
that, in lieu of credit hours or clock
hours as a measure of student learning,
utilizes direct assessment of student
learning, or recognizes the direct
assessment of student learning by
others, and meets the conditions of 34
CFR 668.10. For title IV, HEA purposes,
the institution must obtain approval for
the direct assessment program from the
Secretary under 34 CFR 668.10(g) or (h),
as applicable. As part of that approval,
the accrediting agency must evaluate the
programs and include them in the
institution’s grant of accreditation or
preaccreditation; and review and
approve the institution’s claim of each
direct assessment program’s equivalence
in terms of credit or clock hours.
Reasons: The proposed definition of
‘‘direct assessment program’’ would
restate definitional language from the
HEA, refer to the section of the Student
Assistance General Provisions
regulations that relate to direct
assessment programs, and indicate the
accrediting agency role in approving a
direct assessment program. Some of the
non-Federal negotiators indicated their
unfamiliarity with direct assessment
programs and asked for clarification of
the term and of the phrase ‘‘or
recognizes the direct assessment of
student learning by others.’’ In
particular, they asked whether prior
learning assessment, where students
demonstrate that they possess collegelevel knowledge of a subject that has
been acquired outside of a traditional
classroom setting, such as at work,
through volunteer service, or through
other experiences, would be covered by
the proposed definition. In response, the
Department explained that, because
prior learning assessment is a process
that results in a student being granted a
certain number of academic credits (or
credit hours), prior learning does not
meet the definition of a direct
assessment program.

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A direct assessment program is one
where the institution identifies a set of
competencies that a student must
demonstrate through successful
performance on assessments in order to
be awarded an academic credential. The
skills and knowledge that a student has
acquired outside of the institution may
help the student to complete the
assessments associated with one or
more of the competencies more quickly
than another student, and to accelerate
completion of a full program. A student
who is enrolled in a direct assessment
program is not required to earn a certain
number of credits, or to remain in the
program for a specific length of time.
The institution may develop the
assessments, or it may rely upon
assessments developed by others, to
measure the student’s learning.
The Department notes that ‘‘direct
assessment program’’ has no fixed
meaning outside the context of the title
IV, HEA Federal student aid programs.
The process that an institution has to go
through to gain approval from the
Secretary for a direct assessment
program to be eligible for title IV, HEA
program purposes under 34 CFR 668.10,
which includes reviews and actions on
the part of accrediting agencies, is
sufficient to satisfy program eligibility
requirements of the HEA.
Recognition (§ 602.3)
Statute: The HEA does not include a
definition of ‘‘recognition’’.
Current Regulations: There is no
definition of ‘‘recognition’’ in the
current regulations.
Proposed Regulations: The proposed
regulations would add a definition of
‘‘recognition’’ in § 602.3. Under the
proposed definition, ‘‘recognition’’
would mean an unappealed
determination by the senior Department
official, or a determination by the
Secretary on appeal, that an accrediting
agency complies with the criteria for
recognition and that the agency is
effective in its application of those
criteria. As a result of that
determination of compliance, an
accrediting agency that has been given
a grant of recognition by the Secretary
is regarded as a reliable authority
regarding the quality of education or
training offered by the institutions or
programs it accredits. The proposed
definition would specify that the grant
remains in effect for the term specified
except upon a determination made in
accordance with subpart C, as revised in
these proposed regulations, that the
agency no longer complies with the
criteria for recognition or that it is no
longer effective in its application of
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Reasons: The proposed definition
would clarify that, through proceedings
conducted under subpart C of part 602,
the Department may withdraw
recognition before the period of
recognition granted expires. The
definition would also reflect that,
although an agency that is recognized is
deemed a reliable authority regarding
the quality of education or training
offered by the institutions or programs
it accredits, recognition is based on a
determination that the agency is in
compliance with the statutory and
regulatory criteria for recognition and is
effective in its application of those
criteria.
Scope of Recognition (§ 602.3)
Statute: The HEA does not include a
definition of ‘‘scope of recognition’’.
Section 496(a)(4)(B) of the HEA requires
an accrediting agency that has or wants
to include distance education or
correspondence education in its scope
of recognition to demonstrate that its
standards effectively address the quality
of an institution’s distance education or
correspondence education.
Current Regulations: Current
regulations in § 602.3 define ‘‘scope of
recognition’’ and identify five areas for
which recognition may be granted.
Proposed Regulations: The proposed
regulations would amend the definition
of ‘‘scope of recognition’’ in § 602.3 by
adding the phrase ‘‘or correspondence
education’’ to paragraph (5), which
addresses activities related to distance
education.
Reasons: The proposed regulations
reflect changes made by the HEOA.
Teach-Out Agreement (§ 602.3)
Statute: Section 496(c)(6) of the HEA
requires that teach-out agreements
between institutions be approved by the
accrediting agency in accordance with
its standards. The HEA does not provide
a definition of ‘‘teach-out agreement’’.
Current Regulations: Current
regulations in § 602.3 provide a
definition of ‘‘teach-out agreement’’,
which is a written agreement between
institutions that provides for the
equitable treatment of students. It
applies in situations where an
institution stops offering an educational
program before all students enrolled in
that program have completed their
program of study. Under § 602.24(c) of
the current regulations, if an agency is
an institutional accrediting agency, and
its accreditation or preaccreditation
enables institutions to obtain eligibility
to participate in title IV, HEA programs,
the agency must require an institution
that enters into a teach-out agreement
with another institution to submit that

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teach-out agreement to the agency for
approval.
Proposed Regulations: The proposed
regulations would amend the definition
of ‘‘teach-out agreement’’ by limiting its
scope to situations where an institution,
or a location of an institution that
provides one hundred percent of at least
one program offered, ceases to operate
before all enrolled students have
completed their program of study. In
addition, the definition would require
that the agreement provide a reasonable
opportunity for affected students to
complete their program of study. The
proposed changes to current regulations
in § 602.24(c) are discussed under
‘‘Teach-out Plans and Agreements.’’
Reasons: The Department initially
proposed amending the definition of
‘‘teach-out agreement’’ to make it clear
that the agreement should provide for a
reasonable opportunity for students to
complete their program of study if an
institution or an institutional location
that provides one hundred percent of at
least one program, stops offering one or
more of its programs before all students
have completed their program of study.
There was consensus with adding the
language about providing a reasonable
opportunity for students to complete
their program of study.
However, several of the non-Federal
negotiators objected to the proposal that
a teach-out agreement cover an
institutional location that stops offering
one or more of its programs. They noted
that this is a common occurrence and
that it is the responsibility of the
institution to respond to the needs of its
students when this happens. A teachout agreement should only apply in
situations where the institution or
location providing one hundred percent
of at least one program ceases to
operate. The Department concurred.
Teach-Out Plan (§ 602.3)
Statute: Section 496(c)(3) of the HEA
requires an institution to submit for
approval to the accrediting agency a
teach-out plan under specified
conditions. Section 487(f)(2) of the HEA
defines a ‘‘teach-out plan’’ as a written
plan developed by an institution that
provides for the equitable treatment of
students if an institution ceases to
operate before all students have
completed their program of study, and
may include, if required by the
institution’s accrediting agency, a teachout agreement between institutions.
Current Regulations: Current
regulations do not include a definition
of ‘‘teach-out plan’’.
Proposed Regulations: The proposed
regulations would add a definition of
‘‘teach-out plan’’ in § 602.3. The

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proposed regulations would define a
‘‘teach-out plan’’ as a written plan
developed by an institution that
provides for the equitable treatment of
students if an institution, or an
institutional location that provides one
hundred 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.
Reasons: The Department proposes a
definition that incorporates the statutory
definition and clarifies that the
requirement for an institution to have a
teach-out plan applies when an
institutional location that provides one
hundred percent of at least one program
ceases to operate before all students
have completed their program of study.
This is consistent with the treatment of
locations under the closed school
discharge provisions in 34 CFR
682.402(d)(1)(ii)(C) and 685.214(a)(2)(ii).
Under these provisions, a student’s loan
may be discharged if the student is not
able to complete the program of study
for which the loan was provided
because the institution, or any location
or branch the student attended, closed.
The proposed language was acceptable
to the non-Federal negotiators.

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Other Major Issues
Accreditation Team Members (§ 602.15)
Statute: Section 496(c)(1) of the HEA
stipulates that in order to be recognized
by the Secretary as a reliable authority
as to the quality of education or training
offered by an institution seeking to
participate in title IV, HEA programs,
the agency must perform, at regularly
established intervals, on-site inspections
and reviews of institutions of higher
education (which may include
unannounced site visits) with particular
focus on educational quality and
program effectiveness, and ensure that
accreditation team members are welltrained and knowledgeable with respect
to their responsibilities. The HEOA
added a reference to distance education
to the HEA’s requirement that team
members be well-trained and
knowledgeable with respect to their
responsibilities.
Current Regulations: Current
regulations in § 602.15(a)(2) require
individuals serving on agency review
teams and decision-making bodies and
establishing agency policies to be
competent and knowledgeable, qualified
by education and experience in their
own right, and trained by the agency on
its standards, policies, and procedures.
Proposed Regulations: Proposed
§ 602.15(a)(2) would clarify that an

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individual’s qualifications and the
agency’s training of that individual on
his or her responsibilities regarding the
agency’s standards, policies, and
procedures, to conduct its on-site
evaluations, apply or establish its
policies, and make its accrediting and
preaccrediting decisions, should be
appropriate for that individual’s role. In
addition, the proposed regulations
would specify that if an agency’s scope
of recognition includes the evaluation of
distance education and correspondence
education, then the individuals must be
trained in their responsibilities
regarding distance education and
correspondence education.
Reasons: The Department noted that
the statutory language included the new
reference to ‘‘responsibilities regarding
distance education’’ and that in several
other provisions of section 496 of the
HEA, distance education is paired with
correspondence education. The
Department’s initial proposal included a
reference to ‘‘correspondence
education’’ in this section but did not
limit in any way the requirement that
individuals be trained in their
responsibilities regarding distance
education and correspondence
education. Some non-Federal
negotiators asked that the requirement
apply only to those agencies that have
distance education and correspondence
education in their scope of recognition.
The Department agreed with this
suggestion and also with the observation
made during the negotiations that only
those individuals who evaluate
institutions that offer distance education
or correspondence education would
need to be qualified and trained
accordingly.
A non-Federal negotiator presented a
revised draft for consideration by the
negotiators, which addressed this issue
and further clarified the requirement.
This language was acceptable to all the
negotiators and is reflected in the
proposed regulations.
Record Keeping and Confidentiality
(§§ 602.15; 602.27)
Statute: Section 496(a) of the HEA
requires the Secretary to establish
recognition criteria by which the
Secretary will determine, for the
purposes of the HEA or other Federal
purposes, if an agency or association is
a reliable authority as to the quality of
education or training offered by the
institutions or programs it accredits.
These criteria require that the agency
adhere to sound administrative
requirements. Section 496(a)(4) provides
that the Secretary’s recognition criteria
must require that recognized agencies
consistently apply and enforce their

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standards for the duration of the
accreditation period. Section 496(o)
requires the Secretary to promulgate
regulations establishing procedures for
recognition. Section 496(n) requires the
Secretary to conduct a comprehensive
evaluation of accrediting agencies
seeking recognition, including an
independent evaluation of the
information provided by the agency.
Section 487(a)(15) of the HEA requires,
as part of the institution’s Program
Participation Agreement in title IV, HEA
programs, that the institution
acknowledge the authority of the
Secretary, the institution’s accrediting
agency, and others to share information
pertaining to the institution’s eligibility
to participate in title IV, HEA programs,
and regarding any fraud and abuse on
the part of the institution.
Current Regulations: Section
602.15(b)(1) of the current regulations
requires an accrediting agency to
maintain complete and accurate records
of its last two full accreditation or
preaccreditation reviews of each
institution or program it accredits and
provides a list of the various documents
that must be included in those records.
Section 602.27(e) of the current
regulations requires agencies to disclose
to the Department the name of any
accredited institution or program that
the agency has reason to believe is
failing to meet title IV, HEA program
responsibilities or is engaged in fraud or
abuse, along with the agency’s reasons
for concern. Section 602.27(f) of the
current regulations provides for the
Secretary to ask the agency for
information that may bear upon an
institution’s compliance with title IV,
HEA program responsibilities and
stipulates that the Secretary may ask for
this information in order to assist the
Department in resolving problems with
the institution’s participation in the title
IV, HEA programs.
Proposed Regulations: The proposed
regulations in § 602.15(b)(1) would
require the accrediting agency to retain
its records of its last full accreditation
or preaccreditation review of each
institution or program it accredits.
Proposed § 602.15(b)(2) would require
the agency to maintain records of all its
decisions made throughout an
institution’s or program’s affiliation
with the agency regarding the
accreditation and preaccreditation of the
institution or program, which would
include the accrediting agency’s
decisions about substantive changes that
affect the title IV, HEA program
eligibility.
The Department proposes to
restructure the regulations in § 602.27 to
include a new paragraph (b) to address

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the confidentiality of communications
between the agency and the Department.
Specifically, proposed § 602.27(b)
would address situations in which an
agency has a policy relating to
notification to an accredited institution
or program of communications that
occur between the agency and the
Department pursuant to proposed
§ 602.27(a)(6) and (7) (i.e., current
§ 602.27(e) and (f)). Under the proposed
regulations, these policies would need
to provide for a case-by-case review by
the agency of the contact with the
Department and the circumstances
surrounding it to assess whether that
contact should remain confidential. The
proposed regulation would further
require that upon a specific request by
the Department to keep the contact
confidential, the agency must consider
the contact confidential. Proposed
§ 602.27(a)(6) would remove the
language in current § 602.27(e)
acknowledging that the Secretary may
ask for information to assist in resolving
problems with title IV, HEA program
participation.
Reasons: As reflected in section
496(m) of the HEA, the Department
engages in recognition proceedings to
ensure that accrediting agencies that
serve as gatekeepers for Federal
programs are reliable authorities as to
the quality of postsecondary education
provided by the institutions or programs
they accredit. The Department has had
some concern about accrediting
agencies maintaining sufficient
information relevant to an institution’s
accreditation, as is necessary for
agencies to fulfill their gatekeeping
roles. Additionally, there has been a
significant increase over time in the
number of substantive changes at
institutions that affect an institution’s
title IV, HEA program eligibility.
Agencies have not always been able to
provide the Department with
information related to substantive
changes. While needing to ensure that
required documentation is retained by
agencies, the Department does not want
to overly burden agencies by requiring
them to retain multiple cycles of
information, which can be voluminous.
Therefore, the proposed regulations in
§ 602.15(b)(1) would require that an
agency retain all documentation of its
last full accreditation or
preaccreditation review of each
institution or program. The proposed
regulations in § 602.15(b)(2) would
require agencies to retain all decisions
made throughout an institution’s
affiliation with the agency and
significantly related correspondence for
substantive changes as well as for
decisions regarding the accreditation or

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preaccreditation of an institution or
program. Appropriate documentation
must be retained with all decisions.
The non-Federal negotiators agreed
with the proposed changes to
§ 602.15(b)(1) to reduce the number of
review cycles of information to be
retained. None of the negotiators
objected to the proposed requirement
that agencies retain information about
substantive changes. Several nonFederal negotiators expressed concern
about the proposed changes related to
confidentiality. Issues of confidentiality
regarding contact between the
Department and accrediting agencies
have long been a concern to the
Department.
The Department respects the
important role that collegiality and
frank exchanges play in effective
accrediting practice. However, the
Department has found that agency
policies providing for automatic
disclosure to accredited institutions and
programs of all departmental
communications are at odds in some
circumstances with both the
gatekeeping role of recognized
accreditors and the Department’s
fiduciary responsibilities to ensure that
Federal programs are run efficiently and
effectively and are protected against
fraud and abuse. In trying to reach the
proper balance, the Department has
proposed changes to § 602.27(b),
including a requirement for agencies
with policies regarding notification to
an institution or program of contact
with the Department to review each
contact on a case-by-case basis to
properly assess whether confidentiality
should be maintained. In addition, if the
Department specifically requests that a
contact it has with an agency remain
confidential, then the agency is required
to consider that contact confidential.
The Department believes these
provisions strike the appropriate
balance, and are necessary to ensure
that the Federal fiscal interest and the
interests of students and institutions are
fully protected. The sentence in current
§ 602.27(e) referring to the Secretary’s
authority to request information from
accrediting agencies to resolve problems
with title IV, HEA program participation
would be removed as extraneous.
Non-Federal negotiators expressed
concern about the Department’s initial
proposal in this area, which would have
prohibited an agency from establishing
a policy of providing notification to an
institution regarding contact with the
Department. The Department revised its
proposed approach in response, to
permit agencies to have policies within
the limits described above, and the non-

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Federal negotiators did not object to the
revised language.
Student Achievement (§ 602.16)
Statute: Section 496(a)(5)(A) of the
HEA provides that an accrediting
agency’s standard by which it assesses
an institution’s success with respect to
student achievement in relation to the
institution’s mission may include
different standards for different
institutions or programs, as established
by the institution including, as
appropriate, consideration of State
licensing examinations, course
completion, and job placement rates.
The phrase ‘‘which may include
different standards for different
institutions or programs, as established
by the institution’’ was added by the
HEOA.
The Rule of Construction in section
496(p) of the HEA, added by the HEOA,
stipulates that an accrediting agency is
not restricted from setting, with the
involvement of its members, and
applying, accreditation standards for or
to institutions or programs that seek
review by the agency. In addition, the
Rule of Construction stipulates that an
institution is not restricted from
developing and using institutional
standards to show its success with
respect to student achievement, which
achievement may be considered as part
of any accreditation review.
Current Regulations: Current
regulations in § 602.16(a)(1)(i) replicate
the statutory language in section
496(a)(5)(A) of the HEA, except that
they do not include the phrase that was
added by the HEOA.
Proposed Regulations: The proposed
regulations in § 602.16(a)(1)(i) would
replicate the new statutory language in
section 496(a)(5)(A) of the HEA. The
proposed regulations in § 602.16(e)
would replicate the Rule of
Construction in section 496(p).
Reasons: While section 496(g) of the
HEA, as amended by the HEOA,
prohibits the Secretary from establishing
any criteria that specify, define, or
prescribe the standards that accrediting
agencies use to assess any institution’s
success with respect to student
achievement, the Secretary is obligated
to amend the current regulations that do
not reflect the new language in the HEA
regarding the kind of student
achievement standards recognized
agencies must have.
The Department’s initial proposed
regulations did not include the Rule of
Construction from the statute. Several
non-Federal negotiators asked that the
Rule of Construction be incorporated
into the regulations. The Department
included in the proposed regulations

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the Rule of Construction from the
statute. The non-Federal negotiators
agreed with the Department that an
accrediting agency would need to make
a judgment about whether an institution
developed and used reasonable
standards to show its success with
respect to student achievement.
Distance Education and
Correspondence Education (§§ 602.16;
602.17; 602.18; 602.27)
Statute: Section 496(a)(4)(B) of the
HEA, as amended by the HEOA,
specifies that if an agency has or seeks
to include within its scope of
recognition the evaluation of the quality
of institutions or programs offering
distance education or correspondence
education, the agency must, in addition
to meeting the other requirements,
demonstrate that its standards
effectively address the quality of an
institution’s distance education or
correspondence education with respect
to the standards specified in section
496(a)(5). However, the statute provides
that the agency is not required to have
separate standards, procedures, or
policies for the evaluation of distance
education or correspondence education
in order to meet the requirements of
section 496(a)(4)(B). Section 496(a)(4)(B)
of the HEA, as amended by the HEOA,
also provides that if an accrediting
agency that accredits institutions is
already recognized by the Secretary, it
will not be required to obtain the
approval of the Secretary to expand its
scope of recognition to include distance
education or correspondence education,
provided that the agency notifies the
Secretary in writing of the change in
scope.
Section 496(a)(4)(B) further specifies
that an agency must require an
institution that offers distance education
or correspondence education to have
processes through which the institution
establishes that the student who
registers in a distance education or
correspondence education course or
program is the same student who
participates in and completes the
program and receives the academic
credit.
Section 496(q) of the HEA specifies
that the Secretary shall require a review,
at the next available Advisory
Committee meeting, of any recognized
accrediting agency that has included
distance education or correspondence
education in its scope of recognition
through written notice to the Secretary,
if the enrollment of an institution the
agency accredits that offers distance
education or correspondence education
has increased by 50 percent or more
within any one institutional fiscal year.

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Current Regulations: Current
regulations require an agency to submit
to the Secretary any proposed change in
its policies, procedures, or accreditation
or preaccreditation standards that might
alter its scope of recognition. Current
regulations do not include any
requirement for verifying the identity of
students enrolled in distance education
or correspondence education courses
and programs.
Proposed Regulations: The
Department proposes to restructure
§ 602.16 and add a new paragraph (c).
The new paragraph would provide that
if an agency has or seeks to include
within its scope of recognition the
evaluation of the quality of institutions
or programs that offer distance
education or correspondence education,
the agency’s standards must effectively
address the quality of its institutions’
distance education or correspondence
education in the specified areas. The
agency would not be required to have
separate standards, procedures, or
policies for the evaluation of distance
education or correspondence education.
Section 602.17, which requires the
application of accrediting standards in
reaching an accrediting agency decision,
would be amended by adding a new
paragraph (g) to implement the new
student verification requirements. The
proposed regulations would provide
that agencies require institutions that
offer distance education or
correspondence education to have
processes in place through which the
institution would establish that the
student who registers in a distance
education or correspondence education
course or program is the same student
who participates in and completes the
course or program and receives the
academic credit. The agency would
meet this requirement if it requires
institutions to verify the identity of a
student who participates in class or
coursework by using methods such as a
secure login and pass code or proctored
examinations, and new or other
technologies and practices that are
effective in verifying student identity.
The agency would also be required to
make clear, in writing, that institutions
must use processes that protect student
privacy and must notify students at the
time of registration or enrollment of any
projected additional student charges
associated with the verification of
student identity.
Section 602.18 would be amended to
reflect changes made by the HEOA to
section 496(a)(4) regarding an
institution’s application and
enforcement of standards that respect its
stated mission, including religious
mission.

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As noted in the discussion of recordkeeping and confidentiality, § 602.27
would be restructured. The proposed
regulations would add a new paragraph
(5) to redesignated paragraph (a) that
would provide for notification to the
Secretary that an agency is expanding
its scope of recognition to include
distance education or correspondence
education as provided for in section
496(a)(4)(B)(i)(I) of the HEA, as
amended by the HEOA. The proposed
regulations would specify that the
expansion of scope would be effective
on the date the Department receives the
notification.
Reasons: The proposed changes to the
regulations reflect changes to the HEA
made by the HEOA. The proposed
regulations would require an agency’s
standards to address distance education
and correspondence education
effectively if the agency evaluates
institutions offering distance education
or correspondence education.
Some of the non-Federal negotiators
asked whether an agency whose scope
of recognition already includes distance
education would be required to notify
the Secretary if it wanted to expand its
scope to include correspondence
education, now that correspondence
education is specified separately in the
law. The Department’s position is that,
as the definition of distance education
in the current regulations includes
correspondence study, any previous
grant of a scope of recognition that
included distance education
automatically encompassed
correspondence education, and there is
no need for further action on the part of
agencies currently recognized for
distance education by the Department. If
the proposed regulations are finalized as
drafted, the Department contemplates
including on its Web site listing of
recognized accrediting agencies a
notation that agencies having a scope of
recognition that included distance
education as of the August 14, 2008,
enactment of the HEOA are also
recognized for correspondence
education pending re-evaluation of each
agency as it comes before the
Department for renewal of recognition.
Once the regulations become effective,
agencies whose scope includes distance
education that come up for renewal of
their recognition would be expected to
demonstrate how they evaluate both
distance education and correspondence
education in accordance with proposed
§ 602.16(c). An agency that accredits
institutions and does not already
include distance education or
correspondence education in its scope
of recognition but that desires to do so
would need to either submit a

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notification of expansion of scope (for
distance education, correspondence
education, or both), or request an
expansion of scope to include these in
applying for renewal of recognition, and
in either event, in subsequent reviews
for renewal of recognition, demonstrate
how it evaluates these modes of
education in accordance with proposed
§ 602.16(c). An agency that accredits
only programs could not expand its
scope by notification because section
496(q) of the HEA limits this option to
institutional accreditors. Because of the
limitation, programmatic accreditors
would be required to apply for an
expansion of scope to include distance
education, correspondence education,
or both. The Department proposes to
include programmatic accreditors that
accredit stand-alone institutions in the
set of agencies that may expand their
scope by notification.
In addition to the changes the
Department initially proposed for
§ 602.27(a)(5) to reflect the substance of
the new statutory provision for
including distance education or
correspondence education in an
agency’s scope of recognition upon
written notice by a recognized agency to
the Secretary, the non-Federal
negotiators requested that the
Department include the applicable
statutory citation in the proposed
regulation. The Department agreed. The
Department also included a provision
specifying the effective date of such a
notification so it would be clear to both
agencies and the Department when the
change in scope was effective.
Much of the discussion regarding
distance education at the negotiated
rulemaking sessions centered on the
new requirement to verify student
identity. Some of the non-Federal
negotiators expressed concern about the
cost of implementing the new
provisions, saying they wanted to
ensure that the requirements would be
affordable. They were reluctant to
include requirements that would be
considered ‘‘forward-looking’’ in that
they would address new or emerging
technologies for verifying student
identity. The Department’s initial
position was that the concern about
forward-looking requirements could be
addressed by specifying that new
identification technologies and practices
would have to be adopted only as they
become widely accepted, reasoning that
a technology or practice would not
become widely accepted and used
unless it was affordable. Nevertheless,
several non-Federal negotiators were
concerned about including the ‘‘widely
accepted’’ language and proposed
revising the draft regulation to require

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instead use of ‘‘new or other
technologies and practices that are
effective in verifying student identity,’’
in addition to secure logins and pass
codes and proctored examinations. As
one of the non-Federal negotiators
explained, peer reviewers conducting
on-site reviews will assess an
institution’s use of technology and
verification practices in relation to those
technologies and practices that are
widely used and are affordable, and if
an institution is using ineffective
methods of identification verification,
they will note that finding. The nonFederal negotiators also wanted to make
it explicit that the methods used to
verify the identity of students would be
determined by the institution. As the
draft language provided that the
methods chosen must be effective in
verifying student identification, the
Department accepted the changes
proposed by the non-Federal
negotiators.
The Department originally proposed
specifying that institutions should not
use or rely on technologies that interfere
with student privacy. Several nonFederal negotiators recommended
retaining this concept, but rephrasing
the language to present the concept
more positively. Non-Federal
negotiators also suggested including
language about processes or methods,
which would be broader than referring
to technologies. For these reasons, the
proposed requirement related to student
privacy was restated to require that
institutions make clear in writing that
institutions must use processes that
protect student privacy. To address the
concern of several non-Federal
negotiators that students be made aware
in advance of any additional charges
associated with administering distance
education or correspondence education
examinations, the proposed regulations
would require institutions to notify
students at the time of registration or
enrollment of any projected additional
charges associated with verification of
student identity.
Due Process (§§ 602.18; 602.23; 602.25)
Statute: The HEOA amended section
496(a)(6) of the HEA to include
expanded due process requirements
with which agencies must comply. The
new provisions require that an agency
establish and apply review procedures
throughout the accrediting process,
including evaluation and withdrawal
proceedings, which comply with
specified due process procedures. The
agency must provide adequate written
specification of requirements, including
clear standards for an institution of
higher education or program to be

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accredited, and clearly identify any
deficiencies at the institution or
program examined. In evaluation and
withdrawal proceedings, the procedures
must provide sufficient opportunity for
a written response by an institution or
program regarding any deficiencies
identified by the agency, to be
considered by the agency within a
timeframe determined by the agency
and prior to final action.
Upon written request of an institution
or program, the agency must provide an
opportunity for the appeal of any
adverse action, including denial,
withdrawal, suspension, or termination
of accreditation, taken against the
institution or program, prior to such
action becoming final at a hearing before
an appeals panel. The appeals panel
will not include current members of the
agency’s underlying decision-making
body that made the adverse decision,
and its members must be subject to a
conflict of interest policy. The agency’s
due process procedures must provide
for the right of an institution or program
to representation and participation by
counsel during an appeal of an adverse
action.
The due process procedures must also
provide for a process, in accordance
with written procedures developed by
the agency, through which an
institution or program, before a final
adverse action based solely upon a
failure to meet a standard or criterion
pertaining to finances, may on one
occasion seek review of significant
financial information that was
unavailable to the institution or program
prior to the determination of the adverse
action, and that bears materially on the
financial deficiencies identified by the
agency. If the agency determines that
the new financial information submitted
by the institution or program meets the
criteria of significance and materiality,
the agency must consider the new
financial information prior to the
adverse action becoming final. Any
determination by the agency with
respect to the new financial information
is not separately appealable by the
institution or program.
Current Regulations: Current due
process regulations in § 602.25 require
that an agency have procedures that
afford an institution or program a
reasonable period of time to comply
with an agency’s requests for
information and documents. An agency
must notify an institution or program in
writing of any adverse action or action
to place the institution or program on
probation or show cause and the basis
for the action. Institutions or programs
must be permitted to appeal an adverse
action, and they have the right to be

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represented by counsel during the
appeal. The agency must notify the
institution or program in writing of the
result of its appeal and the basis for the
decision.
Proposed Regulations: The proposed
regulations would amend the due
process provisions in § 602.25, and two
other sections, §§ 602.18 and 602.23,
that bear on due process requirements.
Section 602.18, ‘‘Ensuring consistency
in decision-making,’’ would be
amended to include a new paragraph (a)
that would require an agency to have
written specification of the
requirements for accreditation and
preaccreditation that includes clear
standards for an institution or program
to be accredited. The proposed
regulations in § 602.18 would also
include a new paragraph (e) that would
require an agency to provide an
institution or program with a detailed
written report that clearly identifies any
deficiencies in the institution’s or
program’s compliance with agency
standards.
Section 602.23, ‘‘Operating
procedures all agencies must have,’’
would be amended by removing the
phrase ‘‘upon request’’ from the
requirement in paragraph (a) that an
agency must maintain and make
available to the public certain written
materials. The current regulations
would also be changed by adding at the
end of current paragraph (c)(1), which
concerns the review of complaints, a
stipulation that an agency may not
complete its review and make a decision
regarding a complaint against an
institution unless, in accordance with
published procedures, it ensures that
the institution or program has sufficient
opportunity to provide a response to the
complaint.
The proposed regulations would
restructure § 602.25 of the current
regulations to accommodate the
appropriate placement of several new
statutory requirements by redesignating
several current paragraphs, removing
current paragraph (c) and adding several
new paragraphs. New paragraph (a)
would require an agency to provide
adequate written specification of its
requirements, including clear standards,
for an institution or program to be
accredited or preaccredited. New
paragraph (c) would require an agency
to provide written specification of any
deficiencies identified at the institution
or program examined. New paragraph
(d) would require an agency to provide
sufficient opportunity for a written
response by an institution or program
regarding any deficiencies identified by
the agency, to be considered by the
agency within a timeframe determined

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by the agency and before any adverse
action is taken.
Some of the information in current
paragraph (c) would be included in a
new paragraph (f), including the
requirement that an agency provide an
opportunity, upon written request of an
institution or program, for the
institution or program to appeal any
adverse action prior to the action
becoming final. New paragraph (f)
would also provide that the appeal must
take place before an appeals panel that
may not include current members of the
agency’s decision-making body that took
the initial adverse action and is subject
to a conflict of interest policy. The
appeals panel would affirm, amend, or
reverse the adverse action. At the option
of the agency, either the appeals panel
or the original decision-making body
would be responsible for implementing
the decision of the appeals panel.
Under the proposed regulations in
paragraph (f)(2), the agency would be
required to recognize the right of the
institution or program to employ
counsel to represent the institution or
program during its appeal, and this
would include making any presentation
that the agency permits the institution
or program to make on its own during
the appeal.
The proposed regulations in
paragraph (h)(1) would require an
agency to provide a process, in
accordance with written procedures,
through which an institution or program
may seek review of new financial
information if all of the following
conditions are met: (1) The financial
information was not available to the
institution or program until after the
decision that is subject to appeal was
made; (2) the financial information
provided is significant and bears
materially on the financial deficiencies
identified by the agency (the criteria of
significance and materiality would be
determined by the agency); and (3) the
only remaining deficiency cited by the
agency in support of a final adverse
action decision is the institution’s or
program’s failure to meet an agency
standard pertaining to finances. Under
proposed paragraph (h)(2), a review of
new financial information would be
permitted only one time, and a
determination by the agency with
respect to the new information provided
would not provide the basis of an
appeal.
Reasons: The Department proposes
changes to all of the sections of the
regulations that have a bearing on due
process to implement the new HEA
requirements contained in the HEOA.
With respect to ensuring consistency in
agency decisions, the Department

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initially proposed requiring that
agencies provide institutions or
programs with a written report that
assessed the institution’s or program’s
compliance with the agency’s standards,
including any deficiencies identified by
the agency. Some of the non-Federal
negotiators suggested changing the
language to require that agencies
provide institutions or programs with
reports that clearly identify any
deficiencies in the institution’s or
program’s compliance with agency
standards. The Department agreed to
adopt the alternate language proposed
by the non-Federal negotiators.
The additional provisions on an
agency’s handling of complaints were
proposed to make it clear that
institutions or programs must be given
sufficient opportunity to provide a
response to a complaint before the
agency takes any action.
There was considerable discussion
during the negotiated rulemaking
sessions about the proposed new
language in § 602.25. Some of the nonFederal negotiators described their
current appeals process, and indicated
that when an appeal is received, it is
reviewed by a separate appeals panel
that then makes a recommendation to
the board or commission, which in turn
makes the decision on the appeal. It
became clear during the discussion that
even though the appeals panel might
have members who did not serve on the
original decision-making body, the
appeals panel made a recommendation,
rather than a decision, and the original
decision-making body was under no
obligation to accept the
recommendation. This is problematic
because, if an appeals panel conclusion
is not the final decision, the effect of a
successful appeal may be negated.
The Department proposed requiring
that the appeals panel be a decisionmaking body, noting that the statute
calls for an opportunity to appeal an
action ‘‘prior to such action becoming
final at a hearing before an appeals
panel * * * .’’ The Department also
noted that the reference to the original
decision being made by the agency’s
‘‘underlying decisionmaking body’’
made clear that the appeals panel was
a decision-making body. Otherwise,
there would be no need to refer to the
original body as the ‘‘underlying’’
decision-making body. This proposal
generated a significant amount of
discussion and concern. Several nonFederal negotiators expressed concern
that if the appeals panel were a separate
decision-making body that made an
accreditation decision, it would need to
comply with all the requirements for an
agency decision-making body, including

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having as one of its members a member
of the public, and would result in a
decision being made by a smaller and
less diverse body than the board or
commission.
Other non-Federal negotiators stated
that, in some cases, an appeals panel
might need additional information and
need to solicit information from the
original decision-making body. In other
cases, an appeals panel might determine
that the original decision did not take
into account all the necessary
information, and therefore should be
reversed or amended. In some cases, a
successful appeal would identify a
procedural error made in earlier
proceedings, but would not involve an
inquiry into substantive issues for
purposes of making the accreditation
decision. In a circumstance where the
appeals panel determined that some
citations of deficiencies were supported
and others were not, there would need
to be a new decision on accreditation,
but the appeals panel might not be in a
position to make that decision. Upon
consideration of these scenarios, the
Department proposed having the
appeals panel affirm, amend, or reverse
the adverse action, but permitting either
the appeals panel or the original
decision-making body to implement the
decision of the appeals panel. This
would provide agencies with some
flexibility. However, to make it clear
that the original decision-making body
could not disregard a decision made by
the appeals panel, the proposed
regulations include a provision that if
the original decision-making body is
responsible for implementing the
decision, it must act in a manner
consistent with the appeals panel’s
decision. The proposed regulations
would not require agencies to provide
institutions or programs with a
continual opportunity to appeal.
There was also discussion during
negotiated rulemaking about whether
the new financial information that may
now be provided would have to be
reviewed during an appeal, or whether
it could be reviewed at an earlier time.
The Department revised the proposed
regulations to allow for flexibility in
handling the new financial information.
The new financial information could be
reviewed during an appeal or at an
earlier stage. In either case the agency
could exercise discretion to designate in
its procedures which group of people
will conduct the review. Under the
proposed provisions, it would be
possible to stay an appeal while a
separate body reviewed the financial
information.
Finally, there was extensive
discussion about the circumstances

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under which an agency should be
deemed to be taking a final adverse
action based solely on failure to comply
with financial criteria. Some of the nonFederal negotiators expressed their
belief that to trigger the new provision
that allows for new financial
information to be considered an
institution or program must have been
cited initially only on deficiencies
related to financial criteria. The
Department’s position, reflecting the
language in the statute, is that an
institution or program could have been
cited initially for multiple issues, but
that if all of the issues involving nonfinancial criteria were resolved, new
financial information could be brought
forward for review before the adverse
action became final. This position is
reflected in the proposed regulations.
Monitoring and Reevaluation of
Accredited Institutions and Programs
(§ 602.19)
Statute: Section 496(c)(1) of the HEA
requires accrediting agencies to perform
on-site inspections and reviews of
institutions of higher education at
regularly established intervals. Section
496(c)(2) of the HEA includes a
requirement that accrediting agencies
monitor the growth of programs at
institutions experiencing significant
enrollment growth. Section 496(a)(4)(A)
requires agencies to consistently apply
and enforce standards that ensure that
the courses or programs offered are of
sufficient quality to achieve their stated
objectives for the duration of the
accreditation period.
Section 496(a)(4)(B)(i)(II) of the HEA
permits a recognized agency to expand
its scope of recognition to include
distance education or correspondence
education by notifying the Secretary of
that change in writing. This eliminates
the need for a recognized agency to
obtain separate approval from the
Secretary for the change. However,
section 496(q) of the HEA requires
review by the NACIQI of an agency that
changed its scope through written
notice to the Secretary if the enrollment
of an institution that offers distance
education or correspondence education
that is accredited by that agency
increases by 50 percent or more within
any one institutional fiscal year.
Current Regulations: Current
regulations in § 602.19 require an
accrediting agency to evaluate, at
regularly established intervals, the
institutions or programs it has
accredited or preaccredited. The agency
is required to monitor institutions or
programs throughout their accreditation
or preaccreditation period to ensure that
they remain in compliance with agency

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standards. Current regulations require
agencies to conduct special evaluations
or site visits as necessary.
Proposed Regulations: The proposed
regulations would amend § 602.19(b) by
requiring that an agency demonstrate it
has, and effectively applies, a set of
monitoring and evaluation approaches
that enables the agency to identify
problems with an institution’s or
program’s compliance with agency
standards, and that takes into account
institutional program strengths and
stability. Proposed § 602.19(b) would
require that these approaches to
monitoring include periodic reports,
and collection and analysis of key data
and indicators identified by the agency,
including, but not limited to, fiscal
information and measures of student
achievement. This section of the
proposed regulations would include a
cross-reference to § 602.16(f) to clarify
that an agency is not precluded from
setting and applying its own
accreditation standards; nor are
institutions of higher education
precluded from developing and using
institutional standards to show their
success with respect to student
achievement.
The proposed regulations would add
new paragraphs (c) through (e) to this
section. Section 602.19(c) of the
proposed regulations would require an
agency to monitor the overall growth of
the institutions or programs it accredits
and to collect information on headcount
enrollment at least annually. Section
602.19(d) of the proposed regulations
would add a requirement for
institutional accrediting agencies to
monitor the growth of programs at
institutions experiencing significant
enrollment growth and would provide
that the determination of what is
significant growth would be made by
the agency. Finally, the proposed
regulations, in § 602.19(e), would
require an agency that has notified the
Secretary in writing of an expanded
scope, as provided in section
496(a)(4)(B)(i)(II) of the HEA, to monitor
the headcount enrollment of each
institution it has accredited that offers
distance education or correspondence
education. If any of those institutions
experiences an increase in headcount
enrollment of 50 percent or more within
one institutional fiscal year, the agency
would be required to report that
information to the Secretary within 30
days of acquiring that information.
Reasons: Many of the proposed
regulations would implement changes
required by the HEOA. These changes
include the requirements that agencies
monitor growth of programs at
institutions experiencing significant

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enrollment growth and monitor
headcount enrollment at institutions the
agency accredits that offer distance or
correspondence education. Other
changes to the current regulations are
being proposed, as a result of
discussions both during the negotiated
rulemaking process and within the
Department, in an effort to ensure that
the regulations properly reflect statutory
requirements and provide for greater
consistency while accommodating
differences across institutions. The
Department believes the current
regulatory requirement regarding an
agency’s monitoring to ensure
compliance with all of an agency’s
standards is too broad in scope and too
limiting in method. Therefore the
proposed regulations would stipulate
that an agency monitor an institution to
identify specific problems with the
institution’s or program’s compliance
with accrediting agency standards and
provide more flexibility for agencies as
to how they manage the review.
The Department’s initial proposal for
this section of the regulations would
have required an agency to collect and
analyze key data and performance
indicators, and included an illustrative
list of the data an agency might collect
and analyze when monitoring
institutions or programs. Some nonFederal negotiators expressed concerns
about the illustrative list in the
proposed regulations. Some stated their
belief that certain items on that list
encroached on areas where the
Secretary is prohibited from regulating,
while others wanted the list eliminated
altogether because it could be
interpreted as a requirement that
agencies collect all the information
included on the list and, thus, could
increase institutional burdens. It was
also noted that programmatic
accrediting agencies do not collect
specific financial data, such as audits. A
few non-Federal negotiators objected to
the use of the term ‘‘performance
indicators’’ because they stated that this
could lead to a requirement that an
agency establish ‘‘bright lines’’ for
assessing these indicators. Still other
negotiators indicated that they had no
objections to including an illustrative
list in the regulations.
The Department clarified that the goal
was not to be prescriptive, and that the
list was intended to be illustrative, as
shown by the use of the words ‘‘these
may include but are not limited to.’’ The
Department also reminded the nonFederal negotiators that much of the
proposed language was already in the
standards section of the statute and
current regulations. In addition, the
Department noted that this section of

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the regulations concerns monitoring—
the agency’s application and
enforcement of its standards, policies,
and procedures—rather than the
substance of agency accrediting
standards, as to which the Secretary is
prohibited from regulating.
Based on the discussions with
negotiators and among Department staff,
as well as a shared goal of all
participants to ensure proper
monitoring of institutions and programs,
the proposed language in § 602.19(b)
was modified. The modifications reflect
a proposal made by the non-Federal
negotiators to combine some of the
paragraphs from the initial proposal and
to eliminate redundancy.
The proposed language would
provide accrediting agencies with
flexibility regarding their monitoring of
institutions and programs and at the
same time ensure they will review and
analyze key data and indicators,
including fiscal information and
measures of student achievement. The
Department expects agencies to examine
and take appropriate action based on the
fiscal, student achievement, and other
data collected through the monitoring
process. The Department noted that this
is an area of great importance and that
the Department’s responsibility to
ensure effective and efficient monitoring
takes place is fundamental. The
Department made clear that it accepted
the proposals by the non-Federal
negotiators because the proposals
adequately reflect these principles.
Substantive Change (§ 602.22)
Statute: Section 496(a) of the HEA
requires the Secretary to establish
recognition criteria to determine if an
accrediting agency is a reliable authority
as to the quality of education or training
offered by an institution or program it
accredits.
Section 496(a)(1) of the HEA requires
an agency to demonstrate the ability and
experience to operate as an accrediting
agency. Section 496(a)(4) of the HEA
requires an agency to consistently apply
and enforce standards that ensure
courses or programs are of sufficient
quality to achieve the stated objectives
for which they are offered throughout
the duration of the accreditation period.
Section 496(a)(5) of the HEA requires
the agency to have standards that
address the quality of an institution or
program in a number of areas. The first
area is an institution’s or program’s
success with respect to student
achievement in relation to an
institution’s mission, including, as
appropriate, consideration of course
completion, consideration of State
licensing examinations, and job

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placement rates. In addition, standards
must address an institution’s or
program’s curricula; faculty; facilities,
equipment, and supplies; fiscal and
administrative capacity; recruiting and
admissions practices, academic
calendars, catalogs, publications,
grading, and advertising; measures of
program length and the objectives of the
degrees or credentials offered; record of
student complaints; and record of
compliance with an institution’s
program responsibilities under title IV
of the HEA. Finally, section 496(c) of
the HEA requires the agency to follow
various operating procedures, including,
but not limited to, conducting regular
on-site visits to institutions it accredits,
monitoring the growth of programs at
institutions with significant enrollment
growth, reviewing an institution’s plans
for the addition of new branch
campuses, and conducting visits to new
branch campuses and to institutions
following a change of ownership.
Current Regulations: Section 602.22 of
the current regulations requires an
agency to maintain an adequate
substantive change policy that ensures
any substantive change to the
educational mission or program or
programs of an institution after it has
been accredited does not adversely
affect the capacity of the institution to
continue to meet the agency’s standards.
Section 602.22(a)(2) lists seven types of
changes that, at the least, must be
included in the agency’s definition of
substantive change. Section 602.22(b) of
the current regulations allows the
agency to establish procedures to grant
prior approval of a substantive change.
Section 602.22(c) provides that if the
agency’s accreditation of an institution
enables the institution to participate in
title IV, HEA programs, the agency’s
procedures for approval of an additional
location must include certain processes.
Proposed Regulations: The proposed
regulations would amend the list of
events that would constitute a
substantive change. Proposed
§ 602.22(a)(2)(iii) would include the
addition of courses or programs that
represent a significant departure ‘‘from
the existing offerings of educational
programs,’’ in place of the current
language regarding a significant
departure ‘‘in content.’’ Proposed
§ 602.22(a)(2)(iv) would be amended to
clarify that the addition of programs of
study at a degree or credential level
different from, rather than only those
above the level already included in the
institution’s accreditation, would be
considered a substantive change. (The
meaning of ‘‘program of study’’ is
elaborated on further within this

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preamble in the discussion of § 602.24,
teach-out plans and agreements.)
The proposed regulations would add
to the list of substantive changes, a
provision to implement the requirement
in 34 CFR 668.5(c)(3)(ii)(C) that an
eligible institution’s accrediting agency
determine that an institution’s
arrangement to contract out more than
25 percent of an educational program to
entities that are not eligible on their
own to participate in title IV, HEA
programs meets the agency’s standards
for the contracting out of educational
services.
The proposed regulations would
further modify § 602.22(a)(2) by adding
a new paragraph (viii) to provide greater
flexibility to accrediting agencies in
granting prior approval of additional
locations where at least 50 percent of an
educational program is offered. The new
flexibility would apply to institutions
that, according to agency criteria, have
demonstrated sufficient capacity to add
locations, and no longer need prior
agency approval for each addition.
These criteria would require an
institution to provide satisfactory
evidence that it has: A system to ensure
quality across a distributed enterprise
that includes clearly identified
academic control; regular evaluation of
the locations; adequate faculty,
facilities, resources and academic and
student support systems; financial
stability; and long-range planning for
expansion. To qualify for these
preapprovals, an institution must also
have successfully completed at least one
cycle of accreditation of maximum
length offered by the agency and one
renewal, or been accredited for at least
ten years, and already have at least three
additional locations that the agency has
approved. The agency must require
timely reporting by the institution to the
agency of each additional location
established under the agency’s approval
and the agency’s preapproval may not
extend longer than five years. The
proposed regulations would not allow
the agency to preapprove an
institution’s addition of locations under
this process after the institution
undergoes a change in ownership until
and unless the institution demonstrates
it meets the conditions outlined in this
section of the proposed regulations
under its new ownership. Further,
agencies would be required to have an
effective mechanism for visiting a
representative sample of additional
locations approved under paragraph
(a)(2)(viii) at reasonable intervals.
The proposed regulations in new
paragraphs § 602.22(a)(2)(ix) and (x)
would also require that agencies include
as substantive changes the acquisition of

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any other institution or program or
location of another institution, and the
addition of a permanent location at the
site of a teach-out the institution is
conducting.
The proposed changes to § 602.22(a)
also would include the addition of a
new paragraph (3) requiring an agency
to define, as part of its substantive
change policy, when changes made at or
proposed by an institution are
considered sufficiently extensive to
require the agency to conduct a new
comprehensive review of that
institution.
Proposed changes to § 602.22(b)
would retain the agency’s ability to
determine its own procedures for
granting prior approval of a substantive
change. However, those procedures
must specify an effective date on which
the change would be included in the
program’s or institution’s accreditation.
The proposed regulations would require
that the effective date not be retroactive,
with a limited exception for changes of
ownership.
Finally, a proposed addition to
§ 602.22(c) would clarify the
requirement that an agency have an
effective mechanism for conducting
visits to additional locations of
institutions that operate more than three
additional locations. The proposed
regulations specify that the agency must
visit a representative sample of those
locations at reasonable intervals.
Reasons: In recognition of the pace at
which change is occurring within the
higher education community, including
the addition of new locations of
institutions, the development of new
curricula, and ownership changes, the
Department believed that it was
important to bring these issues to the
negotiators for discussion. The
Department sought to ensure continued
effective compliance with the statute in
developing regulations that recognize
the changing nature of higher education,
while maintaining fiduciary
responsibility.
Many institutions now operate as
distributed enterprises. That business
model is one that encompasses the
establishment of multiple locations
operated within the context of a single
administrative system. The current
regulations pertaining to substantive
change do not accommodate this type of
innovative model, because an
accrediting agency must focus on
individual additional locations of an
institution. The current regulations do
not allow an agency to determine if an
institution has a system to ensure
quality across a distributed enterprise
and to consider the unit of analysis to

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be the system as a whole rather than
each individual location.
The Department’s approach to address
new types of institutional organizational
structures was to use the substantive
change provisions to modify and clarify
the additional location approval
requirements that apply to traditional
institutions, and those that apply to
institutions that operate on a model
where the establishment of locations is
a standard practice that is carried out in
a manner that ensures quality across all
of the individual locations. Initial
language proposed by the Department to
the negotiators did not, in the opinion
of some non-Federal negotiators,
provide the appropriate clarity, and
some non-Federal negotiators
questioned the proposed use of the
phrase ‘‘addition of multiple locations’’
rather than simply using ‘‘the addition
of locations’’ noting that a change in the
phrasing may lead to some confusion.
Some non-Federal negotiators stated
that the Department’s proposed
restructuring of the regulations was
difficult to follow and that the two
headings the Department initially
proposed to add in order to draw a
distinction between types of institutions
were misleading. The Department
agreed to review the language and
redrafted the proposed regulations by
further restructuring the language, and
removing the headings. However, the
Department retained use of the phrase
‘‘distributed enterprise’’ because it
describes the concept intended without
unduly limiting the business models
covered.
Some non-Federal negotiators raised a
concern about the language initially
proposed in § 602.22(a)(2)(iii) regarding
a change in academic content, while
appreciating the intent of the language,
and asked the Department to amend the
language to provide clarity. The revised
language discussed with and agreed to
by the negotiators would provide for a
substantive change to include the
addition of courses or programs that
represent a significant departure from
the existing offerings of educational
programs, or methods of delivery, from
those that were offered when the agency
last evaluated the institution. There was
further discussion about what
constituted a ‘‘significant departure’’
from existing offerings. Several nonFederal negotiators raised examples
such as changing individual courses
within a program, altering the syllabus
from one year to the next, or changing
text books for a course or program, and
asked the Department if those would
constitute a significant departure in
existing offerings of educational
programs, or method of delivery. The

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Department clarified that a significant
departure from the existing offerings of
educational programs, while determined
by the agency, would not result from an
individual course or text book change,
or from the change in some faculty
members. However, an agency might
consider it significant if an entire
department of faculty members left an
institution or, as one non-Federal
negotiator pointed out as an example, if
an institution or program began
delivering courses through distance
education that were not previously
available at the institution.

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Teach-out Plans and Agreements
(§ 602.24)
Statute: Section 496(c)(3) of the HEA,
added by the HEOA, specifies that,
among other requirements, to be
recognized by the Secretary as a reliable
authority as to the quality of education
or training offered by an institution
seeking to participate in title IV, HEA
programs, an accrediting agency must
require an institution it accredits to
submit a teach-out plan for approval by
the accrediting agency if any of three
events occurs: (1) The Department
notifies the accrediting agency of an
action against the institution pursuant
to section 487(f) of the HEA; (2) the
accrediting agency acts to withdraw,
terminate or suspend the accreditation
of an institution; or (3) the institution
notifies the accrediting agency that the
institution intends to cease operations.
Section 487(f) of the HEA defines
‘‘teach-out plan’’ and adds an
institutional requirement that in the
event the Secretary initiates a limitation,
suspension, or termination of the
participation of an institution of higher
education in any program under title IV
under the authority of section
487(c)(1)(F) of the HEA, or initiates an
emergency action under the authority of
section 487(c)(1)(G) of the HEA, and its
prescribed regulations, the institution is
required to prepare a teach-out plan for
submission to the institution’s
accrediting agency in compliance with
section 496(c) of the HEA, the
Secretary’s regulations on teach-out
plans, and the standards of the
institution’s accrediting agency.
Current Regulations: The current
regulations specify that if an agency’s
accreditation enables an institution to
obtain eligibility to participate in the
title IV, HEA programs, the agency must
require the institution to submit any
teach-out agreement the institution
enters into with another institution for
agency approval. ‘‘Teach-out
agreement’’ is defined in the current
regulations in § 602.3.

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Proposed Regulations: The proposed
regulations would restructure
§ 602.24(c) of the current regulations to
include teach-out plans as well as teachout agreements. The proposed
regulations would expand accrediting
agency responsibilities by providing
that agencies require the institutions
they accredit or preaccredit to submit a
teach-out plan to the agency for
approval upon the occurrence of any of
four events: (1) The Secretary notifies
the agency that the Secretary has
initiated an emergency action against an
institution in accordance with section
487(c)(1)(G) of the HEA, or has initiated
a limitation, suspension, or termination
of the participation of an institution of
higher education in any title IV, HEA
program, in accordance with section
487(c)(1)(F) of the HEA, and that a
teach-out plan is required; (2) the
agency acts to withdraw, terminate or
suspend the accreditation or
preaccreditation of the institution; (3)
the institution notifies the agency that it
intends to cease operations entirely or
close a location that provides one
hundred percent of at least one program;
or (4) a State licensing or authorizing
agency notifies the agency that an
institution’s license or legal
authorization to provide an educational
program has been or will be revoked.
The proposed regulations would
require an agency to evaluate each
teach-out plan to ensure it provides for
the equitable treatment of students
under criteria established by the agency,
specifies additional charges, if any, and
provides for notification to the students
of any additional charges. An agency
that approves a teach-out plan that
includes a program that is accredited by
another recognized accrediting agency
would be required to notify that
accrediting agency of its approval. The
proposed regulations would also specify
that an agency may require an
institution it accredits or preaccredits to
enter into a teach-out agreement with
another institution of higher education
as part of its teach-out plan.
The proposed regulations would also
amend the current requirement with
respect to the submission of any teachout agreement by an institution to an
agency to clarify that the agreement
must be submitted for agency approval
whether it was entered into at the
institution’s own volition or at the
request of the agency.
Current regulations would also be
amended to add additional specificity to
the requirement that the agency approve
a teach-out agreement only if it provides
for the equitable treatment of students.
Under the proposed regulations, the
agency’s obligation would pertain to

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circumstances in which either an entire
institution, or one of its locations at
which it provides one hundred percent
of at least one program offered, ceased
operations, and would include requiring
that the teach-out institution have the
necessary experience, resources, and
support services to remain stable, carry
out its mission, and meet all obligations
to existing students. The proposed
regulations would also require that a
teach-out institution provide students
with information about additional
charges, if any.
The proposed regulations would also
amend paragraph (d) in the current
regulations in § 602.24 to specify that if
an institution the agency accredits or
preaccredits closes without a teach-out
plan or agreement, the agency must
work with the Department and
appropriate State agency, to the extent
feasible, to assist students in finding
reasonable opportunities to complete
their education without additional
charges.
Reasons: The Department proposes to
specify that a teach-out plan would be
required in the three circumstances
specified in the statute: The Department
initiates an emergency action or an
action to limit, suspend or terminate an
institution’s participation in the title IV,
HEA programs; the accrediting agency
acts to withdraw, terminate or suspend
the institution; or the institution
indicates it intends to cease operations.
The Department initially proposed
referencing the subpart of the Student
Assistance General Provisions
regulations that contain the regulations
governing limitation, suspension,
termination, and emergency actions.
Some of the non-Federal negotiators
stated that requiring a teach-out plan if
the Secretary initiates an emergency
action, or an action to limit, suspend, or
terminate an institution in accordance
with subpart G of 34 CFR part 668,
might result in confusion and
application of the teach-out
requirements beyond the intent of the
statute, because subpart G is broad and
refers to requirements such as posting of
surety. They stated that requiring teachout plans when the Department requires
letters of credit or places an institution
on heightened cash monitoring is not
mandated under the statute and should
be avoided. The Department agrees that
a requirement that an institution post a
letter of credit, or be subject to
heightened cash monitoring, imposed
outside of a subpart G proceeding,
should not, on its own, trigger a
requirement that the institution submit
a teach-out plan to its accrediting
agency for approval. The Department
agreed to modify the language it

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originally proposed by adding a
reference to the statutory provisions
governing emergency actions and
actions to limit, suspend, or terminate
the participation of an institution in the
title IV, HEA programs. In addition, to
reduce any confusion over when agency
action is required, the proposed
regulation was further revised to specify
that when the Department notifies an
institution and its accrediting agency
that the Department is initiating an
emergency, limitation, suspension, or
termination action, it will also indicate
in the notice that a teach-out plan is
required.
The proposed regulations also provide
that an accrediting agency must require
submission of a teach-out plan when a
State licensing or authorizing agency
notifies the agency that an institution’s
license or legal authorization to provide
an educational program has been or will
be revoked. This provision was added
because loss of State licensing leads
directly to the loss of accreditation and
institutional eligibility, and may well be
followed by closure. There was support
from the non-Federal negotiators for
including this provision.
The addition of a provision in
proposed § 602.24(c)(3) that, if an
agency approves a teach-out plan that
includes a program that is accredited by
another recognized accrediting agency,
it must notify that agency of its
approval, was made to ensure
appropriate sharing of important
information. The new provision in
proposed § 602.24(c)(4) that an agency
may require an institution to enter into
a teach-out agreement as part of its
teach-out plan was added to reflect new
statutory language in section 487(f) of
the HEA. In view of this new language,
the proposed regulations would also
modify the requirement for submission
of teach-out agreements for agency
approval (found in proposed
§ 602.24(c)(5) as restructured), to clarify
that the agreements must be submitted
for approval regardless of whether the
institution enters into the agreement on
its own, or at the request of the agency.
There was extensive discussion about
what the statutory definition of ‘‘teachout plan’’ in section 487(f)(2) of the HEA
means in requiring a teach-out plan or
agreement when an institution ceases to
operate before all students complete
their ‘‘program of study.’’ Whereas
‘‘program’’ is defined in the regulations
in § 602.3 to mean a postsecondary
educational program that leads to an
academic or professional degree,
certificate, or other recognized
educational credential, there is no
definition of ‘‘program of study.’’ In
order to implement a teach-out plan or

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agreement, however, it is necessary to
understand the concept of a ‘‘program of
study.’’ The Department understands a
program of study to be the specific area
of study, or major, within the context of
a degree or certificate program. Thus, to
characterize an English major at a fouryear institution, the student would be
enrolled in a baccalaureate program
with English as the program of study.
What is important, and the reason for
the distinction between ‘‘program’’ and
‘‘program of study’’ with respect to
teach-outs, is that students need to be
provided with the opportunity to
complete their specific program of study
when an institution or location offering
100 percent of at least one program
ceases to operate. Thus, a student in a
baccalaureate degree program who is
preparing to become a teacher must be
able to complete all the teacher
education courses needed for a degree
in that major.
The Department initially proposed
that agencies evaluate a teach-out plan
to ensure it provides for the equitable
treatment of students under criteria
established by the agency and does not
result in duplicative or increased costs.
The Department was concerned that
students not be charged additional
money for a program for which they had
already paid tuition and fees. Moreover,
the concept of accrediting agencies
working with the Department and the
State licensing agency, to the extent
feasible, to ensure that students whose
institution has closed have reasonable
opportunities to complete their
programs without additional charges is
included in the current regulations.
Some of the non-Federal negotiators
noted that institutions that take on
responsibility for teach-outs often lose
substantial money to ensure that
students are taught out properly.
Sometimes, the closing institution did
not provide its students with an
adequate education, and the students
being taught out need additional
education or training to enable them to
complete their program and be
successful. Sometimes this involves
students re-taking a course. Hence,
prohibiting ‘‘duplicative charges’’
through teach-out approval
requirements cannot be presumed to be
in students’ best interests. The
institution conducting a teach-out must
have flexibility, and placing too many
prohibitions or prescriptions on the
teach-out plan may preclude the
establishment of appropriate teach-out
arrangements. The non-Federal
negotiators agreed that it would be
better to require that the teach-out plan
ensure students are notified of any
additional charges that the teach-out

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will entail. The Department agreed with
the non-Federal negotiators. It should be
noted that the Department’s
expectations are that students will not
incur additional or duplicative charges
for participating in a teach-out to
complete their programs of study. If, as
the exception, and not the rule, an
institution serving as a teach-out
institution must charge the students, it
should ensure that any charges are
reasonable, taking into consideration the
impact on the student. Further, the
Department believes it is important for
a teach-out plan to specify if there are
additional charges. To be approved, a
teach-out plan must provide for
notification to the students of any
additional charges.
Several non-Federal negotiators raised
a question about what constitutes
closure of an institution or location.
They noted that there have been
situations in which an institution or
location moved, and did not close, but
the Department deemed the institution
to have closed. During the discussion,
the Department clarified that normally a
move of an institution or location across
the street would be viewed as a change
of address, and would not constitute
closure. However if, for example, an
institution or location moved 20 miles,
there would have to be an examination
of the circumstances. A 20-mile move in
a rural area might not have a major
impact on the majority of an
institution’s students, whereas a 20-mile
move in an urban area could
disadvantage an institution’s students to
the point where they could no longer
attend the institution. In ascertaining
whether an institution or location has
closed or moved, key considerations are
whether the institution’s faculty, staff
and students move with the institution
or location.
Under the proposed regulations, the
requirement that agencies work with the
Department regarding closed schools
would apply to those schools that close
without a teach-out plan or agreement.
The Department proposed to require
that students be given reasonable
opportunities to complete their
education ‘‘without duplicative or
increased charges.’’ Several negotiators
presented various points of view on the
proposal regarding closed institutions
and locations when there is no teach-out
plan or agreement. Some non-Federal
negotiators suggested focusing on what
was being done to protect the students
and noted that what is best for the
students must be evaluated on a caseby-case basis. Other non-Federal
negotiators expressed concern that the
proposed language could be read to
imply that the accrediting agency would

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be required to assume a financial
obligation for teaching out the students
in such circumstances. However, a nonFederal negotiator stated a belief that,
while it is understandable that
accrediting agencies do not want the
regulations to imply that they have any
liability for the educational expenses of
students when an institution or location
closes without a teach-out plan or
agreement in place, it is likely that
accrediting agencies will incur ordinary
in-kind expenses, such as some
expenditure of staff time, in complying
with the recognition criteria pertaining
to teach-outs and school closures.
The Department agrees that it expects
agencies to expend staff time and make
other ordinary and customary
commitments of agency resources in the
course of assisting students in finding
reasonable opportunities to complete
their programs of study, but that
agencies are not expected to pay for the
educational expenses of students in this
situation. In addition, to avoid the
appearance that the Department is
creating any new or unusual financial
obligations for agencies, the Department
agreed to remove the references to
‘‘ensuring’’ that students do not incur
‘‘additional or duplicative charges’’ in
favor of language simply requiring that
agencies ‘‘assist students’’ in finding
reasonable opportunities to complete
their programs ‘‘without additional
charge.’’

jlentini on DSKJ8SOYB1PROD with PROPOSALS3

Transfer of Credit (§ 602.24)
Statute: As amended by the HEOA,
section 496(c)(9) of the HEA specifies,
among other requirements, that to be
recognized by the Secretary as a reliable
authority as to the quality of education
or training offered by an institution
seeking to participate in title IV, HEA
programs, an accrediting agency must
confirm, as part of the agency’s review
for initial or renewal of accreditation,
that an institution has transfer of credit
policies that are publicly disclosed and
that include a statement of the criteria
established by the institution regarding
the transfer of credit earned at another
institution of higher education.
Section 485(h) of the HEA contains a
new HEOA requirement that institutions
publicly disclose their transfer of credit
policies in a readable and
comprehensible manner. This section
also specifies that neither the Secretary
nor the NACIQI is authorized to require
particular policies, procedures, or
practices by institutions with respect to
transfer of credit.
Current Regulations: There are no
current regulations addressing transfer
of credit.

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Proposed Regulations: Proposed
§ 602.24(e) would incorporate the
provisions of the HEA regarding the
new requirement in the HEOA that
accrediting agencies confirm that
institutions have transfer of credit
policies that are publicly disclosed and
include a statement of the criteria
established by the institution regarding
the transfer of credit earned at another
institution of higher education. The
proposed regulations include a crossreference to the paragraph in 34 CFR
668.43 that the Department plans to
include in a final rule to reflect the
HEOA’s new institutional disclosure
requirement regarding transfer of credit
policies. In the final regulations
governing accrediting agencies, the
complete cross-reference will be
inserted in § 602.24.
Reasons: The new paragraph would
implement the new statutory provisions
contained in the HEOA. Some of the
non-Federal negotiators expressed
concern about a perceived lack of clarity
regarding availability of information and
were interested in having a definition of
‘‘publicly disclosed’’ to make it clear
that the information must be readily
available to students and their advisors.
To address this concern, the proposed
regulations provide a reference to the
new institutional disclosure
requirement that will require
institutions to disclose the information
specified regarding transfer of credit in
a readable and comprehensible manner.
Some non-Federal negotiators wanted
to add language requiring that the
criteria established by the institution
regarding the transfer of credit earned at
another institution of higher education
be fair. These negotiators stated that the
issue of transfer of credit is a serious
one and that full disclosure of this kind
of information is needed so students can
assess the fairness of an institution’s
policies and can decide whether to
apply to the institution. Other nonFederal negotiators said there was a
problem with expanding the statutory
language, noting the Rule of
Construction in section 485 of the HEA
that constrains the Secretary from
elaborating on the requirement. In
addition, the regulations governing
accrediting agencies require only that
the agencies confirm that institutions
being reviewed publicly disclose their
transfer of credit policies. The more
specific requirements on transfer of
credit in section 485 of the HEA govern
institutions, not accrediting agencies.
The proposed regulations reflect the
statutory language, but include a crossreference to the institutional transfer of
credit provisions to address some of the
non-Federal negotiators’ concerns.

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Summary of Agency Actions (§ 602.26)
Statute: Section 496(c)(7) of the HEA
specifies that, among other
requirements, to be recognized by the
Secretary as a reliable authority as to the
quality of education or training offered
by an institution seeking to participate
in title IV, HEA programs, an
accrediting agency must make available
to the public and the State licensing or
authorizing agency, and submit to the
Secretary, a summary of agency actions
including the accreditation or renewal
of accreditation of an institution; the
final denial, withdrawal, suspension, or
termination of accreditation of an
institution; any findings made in
connection with the action taken,
together with the official comments of
the affected institution; and any other
adverse action taken with respect to an
institution or placement on probation of
an institution.
Current Regulations: Section
602.26(b) of the current regulations
requires an agency to provide written
notice of (1) a final decision to place an
institution or program on probation or
an equivalent status, and (2) a final
decision to deny, withdraw, suspend,
revoke, or terminate the accreditation or
preaccreditation of an institution or
program. The notice must be provided
to the Secretary, the appropriate State
licensing or authorizing agency, and
appropriate accrediting agencies at the
same time the accrediting agency
notifies the institution, but no later than
30 days after the decision.
Section 602.26(c) of the current
regulations requires an accrediting
agency to provide written notice to the
public of the decisions identified in
§ 602.26(b)(1) and (b)(2) within 24 hours
of its notice to the institution or
program.
Section 602.26(d) of the current
regulations requires that with respect to
any decision listed in § 602.26(b)(2), the
agency must make available to the
Secretary, the appropriate State
licensing or authorizing agency, and the
public upon request, no later than 60
days after the decision, a brief statement
summarizing the reasons for the
agency’s decision and the comments, if
any, that the affected institution or
program might wish to make with
regard to that decision.
Proposed Regulations: The proposed
regulations regarding disclosure of
accrediting agency actions would
require accrediting agencies to provide
written notice of a final decision to take
any other adverse action not listed in
§ 602.26(b)(2), as defined by the agency,
to the Secretary and the State licensing
or authorizing agency. The proposed

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regulations would also add a crossreference to require agencies to provide
written notice to the public within 24
hours of their notice to the institution or
program of any other adverse action.
Finally, the proposed regulations
would specify in new paragraph (d) that
the accrediting agency, in addition to
providing to the public a brief statement
summarizing the reasons for the
agency’s decision, must provide the
official comments of the affected
institution or program, or evidence that
the institution or program was offered
the opportunity to provide official
comments. The information must be
provided to the public whether or not
the agency receives a request for the
information.
Reasons: Many of the new provisions
in the HEA are already addressed by
current regulations. During negotiated
rulemaking, the non-Federal negotiators
requested that the accrediting agencies
be permitted to define the other adverse
actions, not specified in the regulations,
about which the agencies would be
required to provide information. The
non-Federal negotiators also requested
that the regulations clarify that agencies
need provide only official comments of
an institution or program or, if there are
no official comments, evidence that the
institution or program was offered an
opportunity to provide official
comments. The Department agreed with
the non-Federal negotiators.
Recognition of Agencies by the Secretary
(Subpart C)
Statute: Section 496(o) of the HEA
authorizes the Secretary to develop
regulations that provide procedures for
the recognition of accrediting agencies
and for administrative appeals. Section
496(l)(1)(B) of the HEA specifies the 12month timeframe by which
noncompliant agencies must take
appropriate action to come into
compliance, absent an extension of the
timeframe by the Secretary upon good
cause shown. Section 496(d) of the HEA
stipulates that the period of recognition
not exceed five years. Section 114 of the
HEA, as amended by the HEOA,
restructures the NACIQI and provides
for the establishment of the NACIQI
meeting agenda by the Chairperson of
NACIQI; under the FACA, 5 U.S.C.
Appdx. 1, approval of the meeting
agenda by the Secretary’s designated
Federal official is also required. Section
496(q) of the HEA requires a review, at
the next available NACIQI meeting, of
an agency that has included distance
education or correspondence education
in its scope of recognition through
written notice to the Secretary, if the
enrollment of an accredited institution

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that offers distance education or
correspondence education has increased
by 50 percent or more within any one
institutional fiscal year. Section 496(a)
and (c) of the HEA describes various
kinds of institutional and agency
information that must be made available
to the public, the Secretary or the State
licensing or authorizing agency, as
applicable. Along with HEA
requirements, the Department must
comply with requirements in the
Freedom of Information Act, 5 U.S.C.
§ 552; the Trade Secrets Act, 18 U.S.C.
§ 1905; the Privacy Act of 1974, as
amended, 5 U.S.C. § 552a; the FACA, 5
U.S.C. Appdx. 1; and all other
applicable laws, in considering whether
and when information obtained from
accrediting agencies may, or must, be
disclosed to the public.
Current Regulations: There are two
sets of recognition procedures in the
current regulations. Subpart C provides
review procedures only for an agency’s
application for initial or continued
recognition, and does not stipulate
procedures for other types of
Departmental review pertaining to
recognition proceedings. Subpart D
provides procedures for limitation,
suspension, or termination of
recognition. Under subparts C and D,
the Secretary has the authority to make
a decision regarding an accrediting
agency’s recognition, as well as for any
appeal the accrediting agency may bring
related to that decision.
Section 602.30(c) of the current
regulations states that the Secretary does
not make available to the public any
confidential agency materials
Department staff review during the
evaluation of an agency’s application for
recognition or compliance with the
criteria for recognition.
Proposed Regulations: The proposed
regulations would reflect changes made
by the HEOA regarding the review of
distance education and correspondence
education, and the role of the
Chairperson of the Advisory Committee
in establishing the meeting agenda.
Under the FACA, approval of the
meeting agenda by the Secretary’s
designated Federal official is also
required; ‘‘Designated Federal Official’’
is defined in proposed § 602.3.
The proposed regulations would
combine subparts C and D, thereby
streamlining agency review and
establishing procedures for the
following activities: Applications for an
expansion of scope; submission and
review of compliance reports, as defined
in proposed § 602.3; reviews of
increases in headcount enrollment
described in proposed § 602.19(e); and
staff analyses based on reviews of

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agencies during their period of
recognition. The proposed regulations
would establish the senior Department
official as the decision-maker on
recognition proceedings and the
Secretary as the decision-maker on
appeals. Proposed subpart C would also
make explicit the authority of the senior
Department official to make a decision
in a recognition proceeding in the event
that the statutory authority or
appropriations for the Advisory
Committee ends or that there are fewer
duly appointed Advisory Committee
members than needed to constitute a
quorum, and under extraordinary
circumstances when there are serious
questions about an agency’s compliance
that require prompt attention. Proposed
subpart C would clarify that an agency
may be given no more than 12 months
to address identified deficiencies, after
which time a decision on recognition
would be made on the basis of a
compliance report, unless the senior
Department official (or Secretary, on
appeal), on review of the report,
determines good cause exists to extend
that timeframe.
Proposed § 602.31 would identify
laws governing the Secretary’s
processing and decision-making on
requests for public disclosure of
information obtained during agency
recognition proceedings. Proposed
§ 602.31 would also provide procedures
that an agency may follow in seeking to
protect the confidentiality of trade
secrets and commercial or financial
information that is privileged or
confidential in documents submitted to
the Department in recognition
proceedings. Section 602.31(f)(1) of the
proposed regulations would provide the
citations of the various laws to which
the Secretary’s release of information is
subject, including the Freedom of
Information Act (FOIA); the Trade
Secrets Act; the Privacy Act of 1974, as
amended; and the Federal Advisory
Committee Act.
The proposed regulations would add
a set of procedures an agency may
follow when submitting documents to
the Department for recognition
proceedings in order to assist the
Department in its efforts to avoid
disclosing those materials that are
entitled to protection from disclosure
under applicable law. These procedures
include: Allowing the agency to redact
information that would identify
individuals or institutions and is not
essential to the Department’s review of
the agency; specifying that the agency
make a good faith effort to designate all
business information within the
submission that the agency believes
would be exempt from disclosure under

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exemption 4 of FOIA; identifying any
other material the agency believes
would be exempt from public
disclosure, the factual basis for the
request, and any legal basis the agency
has identified for withholding the
document from disclosure; and ensuring
that the documents submitted are only
those required for Department review or
as specifically requested by the
Department. The proposed regulations
would also make clear that a blanket
designation of material submitted as
meeting the exemptions in FOIA will
not be considered to be in good faith
and will be disregarded. Finally, the
proposed regulations would clarify that
the Secretary processes all FOIA
requests in accordance with 34 CFR part
5 and that all documents provided to
the Advisory Committee are available to
the public.
Reasons: The Department proposes to
combine subparts C and D to establish
consistent procedures that govern the
recognition process. The intent behind
current regulations in subpart D—which
establishes a separate process that
involves subcommittees of the Advisory
Committee for all limitation, suspension
and termination actions—was to
expedite these types of actions.
However, in practice, scheduling and
logistical issues have made it
cumbersome for Department staff and
the Advisory Committee to manage two
processes.
Proposed subpart C would make clear
the parallel processes by which the
Department staff and the Advisory
Committee make recommendations on
recognition that are forwarded, along
with the complete record, to the senior
Department official for a decision. The
Department clarified during negotiated
rulemaking that the NACIQI is, by
definition, an advisory committee that
makes recommendations and is not a
decision-making body. Current
regulations in § 602.33 that provide
procedures for appealing NACIQI’s
recommendation are confusing given
that an appeal suggests that a decision
has been made, whereas in fact, NACIQI
is only making a recommendation.
In lieu of current § 602.33, proposed
§ 602.35 would provide a process by
which the agency and Department staff
may respond to the Advisory
Committee’s recommendation before the
senior Department official makes his or
her recognition decision. Under the
proposed regulations, decision-making
authority would reside with the senior
Department official, whose decisions
would be appealable by the agency to
the Secretary under proposed § 602.37.
The proposed changes to establish the
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decision-maker on recognition and the
Secretary as the decision-maker on
appeals would strengthen due process
by ensuring that the appeal is not
adjudicated by the initial decisionmaker. Under the current regulations,
the decision-making authority on both
recognition and appeals resides with the
Secretary.
The proposed regulations in
§§ 602.32, 602.34, and 602.36 would
increase transparency and efficiency,
and implement HEOA provisions
regarding distance and correspondence
education. These proposed regulations
would detail proceedings for staff and
Advisory Committee review of
applications for recognition or renewal
of recognition, expansions of scope,
compliance reports, and reviews of
increases in headcount enrollment
described in proposed § 602.19(e).
Proposed § 602.33 would provide
procedures for reviews of agencies
during the period of recognition.
Timeframes for various stages of the
review process would be specified to
strengthen due process for agencies.
The Department’s initial proposed
language in subpart C incorporated the
concept that an agency’s compliance
with the criteria for recognition includes
the requirement that an agency ‘‘is
effective in its performance with respect
to those criteria.’’ Some non-Federal
negotiators expressed concern regarding
the word ‘‘performance’’ because they
believed that term is difficult to define.
They suggested that the language be
amended to incorporate the statutory
concept of ‘‘effective application’’ of the
criteria. The Department agreed to
replace the language regarding
‘‘performance’’ with the phrase
‘‘effectively applies those criteria.’’
While addressing non-Federal
negotiators’ concerns regarding the
word ‘‘performance,’’ the proposed
language would retain the statutory
concept of ‘‘effectiveness’’ and the
judgment associated with how an
agency applies its standards.
During the discussions regarding
proposed § 602.37, which would specify
procedures for appealing the senior
Department official’s decision to the
Secretary, some non-Federal negotiators
expressed concerns regarding provisions
for the consideration by the Secretary of
additional information not contained in
the record. In response, the Department
added language specifying that the
information be ‘‘relevant and material’’
and ‘‘pertaining to an agency’s
compliance with recognition criteria.’’ A
parallel change was made to proposed
§ 602.36 which outlines procedures for
review and decision by the senior
Department official. Current regulations

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are silent about procedures in instances
when new and relevant information
becomes available after the NACIQI
meeting but prior to the decision being
made. In the interest of transparency
and due process, the Department
decided to make explicit in the
proposed regulations the senior
Department official’s and the Secretary’s
authority to review all relevant
information prior to making a decision
on recognition. Proposed §§ 602.36 and
602.37 would outline procedures by
which the senior Department official
and the Secretary, respectively, may
proceed in such cases.
Proposed § 602.33 would establish a
procedure for review of agencies during
the period of recognition so that the
Department may ensure an agency’s
continued compliance with subpart B,
and initiate action as necessary. Some
non-Federal negotiators expressed
concern that the Department not act
arbitrarily and provide adequate notice
to and communication with the agency
when conducting a review during an
agency’s period of recognition. In
response to concerns expressed by nonFederal negotiators, the Department
added language to reflect the
consultation between Department staff
and the agency, and the provision to the
agency of the documentation concerning
the inquiry.
Proposed § 602.36(b) would make
explicit the senior Department official’s
authority to make a decision in a
recognition proceeding in the event that
statutory authority or appropriations for
the Advisory Committee ends, or there
are fewer duly appointed Advisory
Committee members than needed to
constitute a quorum. The intent behind
proposed § 602.36(b) is to allow the
Department to act expeditiously and
responsibly in the absence of an
Advisory Committee when the
Department has concerns regarding an
agency’s continued compliance with
subpart B. Some non-Federal negotiators
suggested that the senior Department
official only exercise this authority in
extraordinary circumstances. In
response to non-Federal negotiators’
concerns, the Department added
language to proposed § 602.36(b), which
would specify that the senior
Department official would make a
decision in the absence of an Advisory
Committee only in extraordinary
circumstances when the Department has
serious concerns regarding an agency’s
compliance with subpart B that require
prompt attention.
One non-Federal negotiator expressed
concern that the Secretary could
withhold appointments to NACIQI in
order to prevent the constitution of a

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quorum so that the senior Department
official could exercise the authority to
make a decision without NACIQI review
of the matter. The Department clarified
that this was not the intent of the
provision and further stated that the
withholding of appointments by the
Secretary alone would not prevent a
quorum.
The Secretary is obligated to comply
with the HEA and other applicable
statutes, including FOIA and FACA.
Current regulations do not accurately
reflect the Secretary’s disclosure
obligations under FOIA and other
statutes and must be revised to reflect
the applicable law. In revising the
regulations, the Department is
attempting to spell out the options
available to agencies when submitting
material that the agencies view as
confidential to the Department for
review in recognition proceedings.
There was extensive discussion
among the negotiators about what
material is to be considered
confidential. Several non-Federal
negotiators expressed concern about
how to safeguard confidentiality, ensure
the integrity of the process, and preserve
the relationship between the agency and
the institution. In particular, they
expressed concern that if the agency
were unable to provide guarantees of
confidentiality to its institutions, this
would undermine the relationship
between the agency and its accredited
institutions or programs and indeed the
entire accreditation process.
The Department acknowledged the
importance of confidentiality for
agencies and institutions, but at the
same time, wanted to make the agencies
and institutions fully aware of the
requirements with which the Secretary
must comply in the event a request for
disclosure is made under FOIA or
FACA. The Department also clarified
that should the Inspector General or any
other Federal entity seek to review an
agency or an institution, proposed
procedures under subpart C for
redacting information and marking
documents confidential will not apply,
as these proposed regulations pertain
only to the recognition process.
Several non-Federal negotiators
suggested that the Department could
review required documents on a secure
Web site and thereby not take
possession of them. Others suggested
the Department send staff to the agency
to review documents, but leave them in
the agency’s possession. The
Department explained that it needed to
have a complete and accurate record of
the documents in its possession to
substantiate the Department’s review,
and would, therefore, not be able to

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utilize a secure Web site or an on-site
review of documents. The Department’s
control of the documents reviewed
further protects the integrity of the
review process. For example, if the
Department needed to retrieve a
reviewed document in the future, and
had to rely on obtaining the document
from a Web site, it would have no way
to ensure that the document on the Web
site was the same document it had
originally reviewed.
Another non-Federal negotiator raised
concerns about complaints being
released to the public before they could
be substantiated. The Department
clarified that FOIA pertains to all
documents submitted to the Department
and other Federal Government agencies.
Finally, some non-Federal negotiators
expressed concerns about the conduct of
unannounced site visits by Department
staff to an institution or program as part
of the review of an agency. This
provision exists in both current
§ 602.31(b)(1) and proposed
§ 602.31(e)(1). Some non-Federal
negotiators stated that this was in
conflict with their responsibilities under
the Health Insurance Portability and
Accountability Act (HIPAA). The
Department reviewed HIPAA materials
and found nothing that precludes the
Department from performing
unannounced site visits. Nevertheless,
the Department will cooperate with
health care providers and their business
associates with respect to applicable
procedures required by HIPAA.
Executive Order 12866
Regulatory Impact Analysis
Under Executive Order 12866, the
Secretary must determine whether the
regulatory action is ‘‘significant’’ and
therefore subject to the requirements of
the Executive Order and subject to
review by the Office of Management and
Budget (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

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mandates, the President’s priorities, or
the principles set forth in the Executive
Order.
Pursuant to the terms of the Executive
Order, it has been determined that this
proposed regulatory action would not
have an annual effect on the economy
of more than $100 million. Therefore,
this action is not ‘‘economically
significant’’ and not subject to OMB
review under section 3(f)(1) of Executive
Order 12866. Notwithstanding this
determination, 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 this NPRM, these
proposed regulations are needed to
implement the provisions of the HEA, as
amended. In particular, these proposed
regulations address the provisions
related to the recognition of accrediting
agencies by the Secretary.
In addition, these proposed
regulations are needed to ensure that the
Department fulfills its fiduciary
responsibility regarding the appropriate
use of Federal funds made available by
the Department to institutions of higher
education under title IV of the HEA. The
Secretary grants recognition to
accrediting agencies that are considered
by the Department to be reliable
authorities regarding the quality of
education or training offered by the
institutions or programs they accredit.
Congress requires that an institution of
higher education be accredited by an
accrediting agency recognized by the
Secretary in order to receive Federal
funds authorized under title IV, HEA
programs.
Section 492 of the HEA requires the
Secretary, before publishing any
proposed regulations for programs
authorized by title IV of the HEA, to
obtain public involvement in the
development of the proposed
regulations. After obtaining advice and
recommendations from individuals and
representatives from relevant
constituent groups, the Secretary must
subject the proposed regulations for the
title IV, HEA programs to a negotiated
rulemaking process. All proposed
regulations that the Department
publishes must conform to final
agreements resulting from that process
unless the Secretary reopens the process
or provides a written explanation to the
participants in that process stating why
the Secretary has decided to depart from
the agreements. The 2009 negotiated
rulemaking committee for accreditation
reached consensus on the proposed
regulatory language contained in this

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NPRM. A summary of the proposed
regulatory language agreed upon by
negotiators is available in the
Significant Proposed Regulations
section.
Regulatory Alternatives Considered
The following section addresses the
alternatives that the Department
considered in implementing the
discretionary portions of the HEOA
provisions. These alternatives are also
discussed in more detail in the Reasons
sections of this NPRM related to the
specific proposed regulatory provisions.
A broad range of alternatives to these
proposed regulations was considered as
part of the negotiated rulemaking
process. These alternatives were
reviewed in detail in the preamble to
this NPRM under both the Regulatory
Impact Analysis and the Reasons
sections accompanying the discussion
of each proposed regulatory provision.
However, the Department is interested
in receiving comments related to other
alternatives to the proposed regulations.
To send any comments that concern
alternatives to these proposed
regulations, see the instructions in the
ADDRESSES section of this NPRM.
Benefit-Cost Analysis

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Benefits
The benefits of these proposed
regulations would include: Ensuring
that accrediting agencies are reliable
authorities as to the quality of education
or training offered by an institution or
program they accredit; ensuring that the
Department fulfills its fiduciary
responsibility for institutional funding
under title IV, HEA programs; and
establishing consistency between
statutory language and regulatory
language. An additional benefit of the
proposed regulations would be
providing accrediting agencies with
greater clarity on regulations regarding
the following: Distance and
correspondence education; accreditation
team members; transfer of credit; teachout plan approval; definition of
recognition; demonstration of
compliance; recognition procedures,
including procedures for NACIQI; direct
assessment programs; monitoring;
substantive change; record keeping and
confidentiality; and due process and
appeals. However, it is difficult to
quantify benefits related to the proposed
regulations. The Department is
interested in receiving comments or
data that would support a more rigorous
analysis of the benefits of these
provisions.

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Costs
Many of the statutory provisions
implemented through this NPRM would
not require accrediting agencies and
institutions to develop new disclosures,
materials, or accompanying
dissemination processes. Other
proposed regulations generally would
require discrete changes in specific
parameters associated with existing
guidance rather than wholly new
requirements. Accordingly, accrediting
agencies wishing to continue to be
recognized by the Secretary and
institutions wishing to continue to
participate in title IV, HEA programs are
estimated to have already absorbed most
of the administrative costs related to
implementing these proposed
regulations.
In assessing the potential impact of
these proposed regulations, the
Department recognizes that certain
provisions are likely to increase
workload for some program
participants. This additional workload
is discussed in more detail under the
Paperwork Reduction Act of 1995
section of this preamble. Additional
workload would normally be expected
to result in estimated costs associated
with either the hiring of additional
employees or opportunity costs related
to the reassignment of existing staff from
other activities. Given the limited data
available, the Department is particularly
interested in comments and supporting
information related to possible
administrative burden to accrediting
agencies and institutions stemming from
the proposed regulations. Estimates
included in this notice will be
reevaluated based on any information
received during the public comment
period.
Two new statutory concepts reflected
in proposed § 602.25 do not exist in
current regulations: (1) An institution’s
or program’s right to appeal adverse
accrediting agency actions to an appeals
panel that is subject to a conflict of
interest policy and that does not contain
members of the underlying decisionmaking body; and (2) an institution’s or
program’s right to review of new
financial information, if the institution
or agency meets certain conditions,
before the accrediting agency takes a
final adverse action.
Although accrediting agencies must
be prepared to respond to appeals and
to requests for review of new financial
information, institutions or programs
decide whether to undertake these
appeals and make these requests. We do
not expect the new provisions to affect
the number of institutions or programs
that appeal an accrediting agency

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adverse action; therefore, there would
be no additional costs to institutions or
programs. Based on the discussion on
this issue at negotiated rulemaking and
historical data on appeals, it is likely
that no more than five institutions per
year will be able to meet the
qualifications to be considered under
the new provision for review of new
financial information and will seek such
a review. The proposed regulations
would also require that an accrediting
agency confirm, as part of the agency’s
review for initial or renewal of
accreditation, that institutions that
participate in title IV, HEA programs
have transfer of credit policies that are
publicly disclosed and that include
statements of the criteria established by
the institutions regarding the transfer of
credit earned at another institution of
higher education. As accrediting
agencies are already required to review
various policies and procedures at the
institutions they accredit, we expect the
addition of this provision will add a few
minutes to an accreditation review. We
do not have the data to provide a more
refined estimate at this time. As
indicated above, we will adjust the
estimate based on any comments
received.
In addition, the proposed regulations
would require an agency that has or
seeks to include the evaluation of
distance education or correspondence
education within its scope of
recognition to require participating
institutions that offer distance education
or correspondence education to have
processes in place through which the
institutions establish that the student
who registers in a distance education or
correspondence education course or
program is the same student who
participates in and completes the course
or program and receives the academic
credit. It is standard practice for
institutions that offer distance or
correspondence education to have
processes that verify the identity of
students; therefore, this provision will
not have an impact on institutions.
Some accrediting agencies that evaluate
distance education or correspondence
already review those processes when
they conduct accreditation reviews. For
those agencies that will have to add a
step to their evaluation process, the time
added to the review process is expected
to minimal. We will refine our estimate
if we receive comments that would
enable us calculate any additional costs
associated with this provision.
Finally, the proposed regulations
would require participating institutions
to submit a teach-out plan to their
accrediting agency upon the occurrence
of any of the following: An emergency

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action of the Secretary against an
institution, or an action by the Secretary
to limit, suspend, or terminate an
institution’s participation in any title IV,
HEA program; an agency action to
withdraw, terminate, or suspend the
accreditation or preaccreditation of the
institution; the institution notifies the
accrediting agency that it intends to
cease operations entirely or close a
location that provides one hundred
percent of at least one program; or a
State licensing or authorizing agency
notifies the accrediting agency that an
institution’s license or legal
authorization to provide an educational
program has been or will be revoked. As
indicated in the Paperwork Reduction
Act section, we expect the average time
needed to develop a teach-out plan is
four hours. Based on historical data that
show the number of institutions that are
subject to Department action, lose
institutional eligibility, or close, and an
estimate of the number of locations that
offer one hundred percent of a program,
we estimate that approximately 70
institutions per year will be required to
submit a teach-out plan to their
accrediting agency. Most of the
institutions and locations that close
offer only one or two programs. For
some institutions, the plan will be very
simple: the institution will teach out its
students. For other institutions,
preparing a plan may involve doing
research to determine what nearby
schools offer similar programs; in most
cases, the institution will already know,
as the nearby schools will have been
their competitors. In a few cases, more
work may be needed to develop the
teach-out plan. This is likely to occur
when the affected institution or location
has offered several different programs.
Given the wide variety of situations, our
best estimate is that the average amount
of time needed to complete a teach-out
plan is four hours. Using May 2009
Bureau of Labor information that the
average hourly wage for private, nonagricultural workers is $18.54, the total
estimated cost for carrying out this
provision is $5,191 (70 institutions × 4
hours/institution × $18.54/hour).
Net Budget Impacts
In general, these estimates should be
considered preliminary; they will be
reevaluated in light of any comments or
information received by the Department
prior to the publication of the final
regulations. The final regulations will
incorporate this information in a revised
analysis.
The net budget impact of these
proposed regulations on accrediting
agencies and institutions of higher
education is estimated to be minimal.

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As previously mentioned, many of the
statutory provisions implemented
through this NPRM will not require
accrediting agencies and institutions to
develop new disclosures, materials, or
accompanying dissemination processes.
In addition, the Department takes steps
in these proposed regulations to limit
the administrative burden on
accrediting agencies and institutions.
The Department believes that most of
the administrative costs related to
implementing these proposed
regulations have already been absorbed
by accrediting agencies and institutions.
As noted in the chart in the Paperwork
Reduction Act section of the preamble,
the net effect on the work of accrediting
agencies and institutions is estimated to
be 3,212 hours. Assuming that the
employee cost of implementing the new
requirements is $18.54/hour (based on
average wage information from the
Bureau of Labor Statistics), the net
budget impact of these proposed
regulations is estimated to be $59,550.
The net budget impact of these
proposed regulations on the Department
is also estimated to be minimal. Primary
additional costs would be incurred for
administering these regulations should
NACIQI decide to convene more than
two national meetings annually.
Because the HEOA provisions afford the
NACIQI chair the authority to set the
agenda for NACIQI meetings with the
approval of the designated Federal
official, it is conceivable that NACIQI
may choose to meet more often than
twice a year. Should this occur, the
Department would incur additional
administrative costs resulting from
convening one or more additional
meetings. The estimated cost to the
Department of convening another
NACIQI meeting is $55,300. No
additional costs to the Department
resulting from these proposed
regulations are anticipated.
In analyzing the net budget impacts of
these proposed regulations, feedback
was received from non-Federal
negotiators during negotiated
rulemaking and from Department staff.
However, data on administrative burden
at participating accrediting agencies and
institutions are extremely limited;
accordingly, as noted above, the
Department is particularly interested in
comments in this area.
Elsewhere in this SUPPLEMENTARY
INFORMATION section we identify and
explain burdens specifically associated
with information collection
requirements. See the heading
Paperwork Reduction Act of 1995.

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Assumptions, Limitations, and Data
Sources
Because these proposed regulations
would largely restate statutory
requirements that would be selfimplementing in the absence of
regulatory action, impact estimates
provided in the preceding section reflect
a pre-statutory baseline in which the
HEOA changes implemented in these
proposed regulations do not exist. In
general, these estimates should be
considered preliminary; they will be
reevaluated in light of any comments or
information received by the Department
prior to the publication of the final
regulations. The final regulations will
incorporate this information in a revised
analysis.
Clarity of the Regulations
Executive Order 12866 and the
Presidential memorandum ‘‘Plain
Language in Government Writing’’
require each agency to write regulations
that are easy to understand.
The Secretary invites comments on
how to make these proposed regulations
easier to understand, including answers
to questions such as the following:
• Are the requirements in the
proposed regulations clearly stated?
• Do the proposed regulations contain
technical terms or other wording that
interferes with their clarity?
• Does the format of the proposed
regulations (grouping and order of
sections, use of headings, paragraphing,
etc.) aid or reduce their clarity?
• Would the proposed regulations be
easier to understand if we divided them
into more (but shorter) sections? (A
‘‘section’’ is preceded by the symbol ‘‘§’’
and a numbered heading; for example,
§ 600.2.)
• Could the description of the
proposed regulations in the
‘‘Supplementary Information’’ section of
this preamble be more helpful in
making the proposed regulations easier
to understand? If so, how?
• What else could we do to make the
proposed regulations easier to
understand?
To send any comments that concern
how the Department could make these
proposed regulations easier to
understand, see the instructions in the
ADDRESSES section of this preamble.
Regulatory Flexibility Act Certification
The Secretary certifies that these
proposed regulations would not have a
significant economic impact on a
substantial number of small entities.
These proposed regulations would
directly affect accrediting agencies and
institutions of higher education that

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Federal Register / Vol. 74, No. 150 / Thursday, August 6, 2009 / Proposed Rules
participate in title IV, HEA programs.
The U.S. Small Business Administration
Size Standards define organizations as
‘‘small entities’’ if they are for-profit or
nonprofit organizations with total
annual revenue below $5,000,000 or if
they are organizations controlled by
governmental entities with populations
below 50,000.
A significant percentage of the
accrediting agencies and institutions
participating in title IV, HEA programs
meet the definition of ‘‘small entities’’.
The Department estimates that
approximately 40 accrediting agencies
and 2,310 postsecondary institutions
meet the definition of ‘‘small entity’’.
The proposed regulatory action would
not substantively change regulations
governing institutional eligibility and
the Secretary’s recognition of
accrediting agencies in a way that
would result in a material increase or
decrease in the number of institutions
participating in title IV of the HEA or in
the number of accrediting agencies
recognized by the Secretary. For these
accrediting agencies and institutions,
the new requirements under the
proposed regulations are not expected to
impose significant new costs. Although
the proposed regulations contain some
new requirements, many agencies and
institutions have policies in place that
are similar to the new requirements. The
Department estimates that costs
attributable to complying with the new
requirements are likely to be small.
As noted in the Paperwork Reduction
Act section of this NPRM, the net effect
on the work of accrediting agencies and
institutions is estimated to be 3,212
hours. For the approximately 2,350
small entities covered by the proposed
regulations, the net budget impact is
estimated to be 1,851 hours. Using the
May 2009 Bureau of Labor data for the
average hourly wage of private, nonagricultural workers, $18.54 per hour,
the estimated cost of the new provisions
to small entities is $34,318.
The impact of the proposed
regulations on individuals is not subject
to the Regulatory Flexibility Act.
The Secretary invites comments from
small accrediting agencies and
institutions as to whether they believe
the proposed changes would have a
significant economic impact on them
and, if so, requests evidence to support
that belief.
Paperwork Reduction Act of 1995
Proposed §§ 602.15, 602.19, 602.24,
602.25, 602.26, 602.27, 602.31, and
602.32 contain information collection
requirements. Under the Paperwork
Reduction Act of 1995 (44 U.S.C.
3507(d)), the Department of Education

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has submitted a copy of these sections
to OMB for its review.
Section 602.15—Administrative and
Fiscal Responsibilities
Proposed § 602.15 would require
accrediting agencies to demonstrate
certain administrative responsibilities,
including maintenance of all accrediting
documentation for each institution from
the last full accreditation or
preaccreditation review. Under the
current regulations, agencies are
required to maintain this documentation
for the previous two accreditation or
preaccreditation reviews. Accrediting
agencies must maintain documents
regarding substantive change decisions
under this requirement in the current
regulations. The proposed regulation
would reduce the administrative burden
to maintenance of only one full
accreditation or preaccreditation review.
Although this represents a reduction of
the burden on agencies under OMB
Control Number 1840–0788, the
reduced hours for maintaining only one
complete review cycle are negligible
because the agencies already collect the
information.
Section 602.19—Monitoring and
Reevaluation of Accredited Institutions
and Programs
Proposed § 602.19(b) would require
agencies to collect data to ensure that
the institutions they accredit remain in
compliance with their regulations. This
proposed regulation would clarify the
language in the current regulation
regarding the data that agencies must
collect to ensure that institutions and
programs remain in compliance with
their accrediting standards. Because the
current regulation requires agencies to
collect this information, the proposed
regulatory language change would not
represent any additional reporting
burden under OMB Control Number
1840–0788.
Proposed § 602.19(c) would require
agencies to monitor the enrollment
growth of institutions or programs they
accredit each year. This proposed
regulation would represent a change in
the information that accrediting
agencies must collect currently. It
would require that agencies collect
information to monitor enrollment
growth for the institutions or programs
that they accredit. The Department
believes that institutions already collect
enrollment data, but estimates that this
regulation would increase the burden to
each of the 61 recognized accrediting
agencies by a total of 122 hours under
OMB Control Number 1840–0788.

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39519

Proposed § 602.19(e) would require
accrediting agencies that expanded their
scope to include distance education or
correspondence education by notice to
the Secretary to monitor enrollment
growth of the institutions they accredit
that offer distance education or
correspondence education. These
agencies must report to the Department,
within 30 days, any institution that
experiences enrollment growth of 50
percent or more during a fiscal year. The
content of the report is described in
§ 602.31(d).
Proposed § 602.19(e) would represent
a change in the information that some
accrediting agencies must collect. The
proposed regulation would only affect
institutional accrediting agencies and
programmatic accrediting agencies that
accredit freestanding institutions that
currently do not have distance
education in their scope of recognition.
Department staff review of currently
recognized accrediting agencies shows
that 27 agencies would not be affected
by this proposed regulation. However 15
of the remaining recognized agencies
may be affected if any decide to include
distance education in their scope of
recognition in the future. The
Department estimates that the
additional reporting requirement would
increase the burden to accrediting
agencies by a total of 60 hours under
OMB Control Number 1840–0788 if all
15 agencies decided to add distance
education or correspondence education
to their scope of recognition.
Section 602.24—Additional Procedures
Certain Institutional Accreditors Must
Have
Proposed § 602.24 would mandate
that an accrediting agency require an
institution it accredits to submit a teachout plan for approval by the accrediting
agency if any of following events occurs:
The Department initiates an emergency
action against an institution, or an
action by the Secretary to limit,
suspend, or terminate an institution
participating in any title IV, HEA
program; the accrediting agency acts to
withdraw, terminate, or suspend the
accreditation or preaccreditation of the
institution; the institution notifies the
agency that it intends to cease
operations entirely or close a location
that provides one hundred percent of at
least one program; or a State licensing
or authorizing agency notifies the
agency that an institution’s license or
legal authorization to provide an
educational program has been or will be
revoked. If the teach-out plan requires a
teach-out agreement, proposed § 602.24
would also identify the components of
the teach-out agreement. The

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Department estimates that the proposed
regulation would place an additional
burden on 70 institutions each year for
a total of 280 hours under OMB Control
Number 1840–0788.

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Section 602.25—-Due Process
Proposed § 602.25 would include two
new statutory concepts. Proposed
§ 602.25(f) would provide for an
institution’s or program’s right to appeal
any adverse accrediting agency action
before an appeals panel that is subject
to a conflict of interest policy and does
not contain members of the underlying
decision-making body. Proposed
§ 602.25(h) would provide for an
institution’s or program’s right for the
review of new financial information, if
it meets certain conditions, before the
accrediting agency takes a final adverse
action.
Although accrediting agencies must
be prepared to respond to appeals and
to requests for review of new financial
information, the decision to undertake
these actions is a voluntary one on the
part of an institution. The new
provisions are not expected to have any
effect on the number of institutions that
appeal an accrediting agency adverse
action, and therefore, there would be
not additional costs to institutions.
Based on the discussion on this issue at
negotiated rulemaking, and historical
data on appeals, it is likely that no more
than five institutions per year will be
able to meet the qualifications to be
considered under the new provision for
review of new financial information and
will seek such a review.
Agencies are already required to have
an appeal process; the burden
associated with revising existing
procedures to conform with the new
requirements is estimated to be 610
hours, which is based on 61 accrediting
agencies × 10 hours. The estimated
burden is associated primarily with
implementing the regulation in the
initial year as agencies establish new
procedures. The burden is estimated to
be 2,440 hours, based on 61 accrediting
agencies × 40 hours. The burden for
maintaining this process in subsequent
years is expected to be minimal, given
that we expect no more than five
agencies will meet the requirements for
such a review.
Section 602.26—Notification of
Accrediting Decisions
Proposed § 602.26(b) would require
agencies to provide a written notice to
the Secretary of any final decision that
is considered by the agency to be an
adverse action and of final decisions
withdrawing, suspending, revoking, or
terminating an institution’s or program’s

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accreditation or preaccreditation.
Proposed § 602.26(d) would require
agencies to make available to the
Secretary and the public a statement
regarding the reasons for withdrawing,
suspending, revoking, or terminating an
institution’s or program’s accreditation
or preaccreditation. The statement must
include either comments from the
affected institution or program regarding
that decision or evidence that the
affected institution or program was
offered the opportunity to provide
comments. The proposed change would
clarify existing language and would
require that the statement provide
evidence that the affected institution or
program was offered an opportunity to
provide comments if no comments were
received. The proposed changes do not
constitute any new reporting
requirements and, therefore, do not
represent any additional burden on
accrediting agencies under OMB Control
Number 1840–0788.
Section 602.27—Other Information an
Agency Must Provide the Department
Proposed § 602.27(a) would require an
accrediting agency to provide to the
Secretary a copy of any annual report it
prepares, an updated directory of its
accredited institutions and programs,
any proposed changes to its policies,
procedures, or accreditation standards
that might alter its scope of recognition
or compliance with the Criteria for
Recognition, and a notification if it is
changing its scope of recognition to
include distance education or
correspondence education. Further, if
requested by the Secretary, an agency
must provide a summary of the major
accrediting activities conducted during
the year. The proposed regulation also
would require an accrediting agency to
provide to the Department, if the
Secretary requests, any information
regarding an institution’s compliance
with its title IV, HEA program
responsibilities.
Although the proposed changes
would primarily clarify language in the
current regulations, the changes would
also affect the reporting requirement
regarding adding distance education or
correspondence education to an
agency’s scope of recognition. The
proposed regulation would remove the
requirement for institutional accrediting
agencies, and programmatic accrediting
agencies that accredit freestanding
institutions, to submit an application to
the Department if an agency wished to
add distance education or
correspondence education to its scope
of recognition; the proposed changes
would only require agencies to notify
the Department that its scope has been

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changed to include distance education
or correspondence education. Therefore,
the proposed changes to the regulation
would not impose any new burden on
accrediting agencies and, in the case of
adding distance education or
correspondence education to a scope of
recognition, it would reduce the burden
on agencies. Department staff estimates
the burden on the 15 agencies that
would be affected by the proposed
regulation would be reduced by 300
hours under OMB Control Number
1840–0788 if all the agencies decided to
add distance education or
correspondence education to their scope
of recognition.
Section 602.31—Agency Submissions to
the Department
Proposed § 602.31(a) would require
accrediting agencies to submit an
application for recognition or renewal of
recognition at the end of the period of
recognition granted by the Secretary,
generally every five years. The
application would be required to
demonstrate that the agency complies
with the Department’s Criteria for
Recognition as defined in CFR 34 part
602. The proposed regulation would
clarify what documents should be
provided with an agency’s application
for recognition. The language of the
proposed regulation would not impose
a new reporting burden on agencies
under OMB Control Number 1840–0788.
Proposed § 602.31(b) would require
accrediting agencies that wish to expand
their scope of recognition to submit an
application to the Secretary. The
proposed language would not place any
additional reporting burden on
accrediting agencies because the current
regulations also require the submission
of an application when an agency seeks
to expand its scope of recognition. The
language of the proposed regulation
would not impose a new reporting
burden on agencies under OMB Control
Number 1840–0788.
Proposed § 602.31(c) would require
that agencies provide a compliance
report when it has been determined that
they do not fully comply with the
criteria for recognition or are ineffective
in applying those criteria. In order for
the Secretary to determine that agencies
are reliable authorities regarding the
quality of education or training offered
by their accredited institutions or
programs, agencies must demonstrate
that they fully comply with 34 part 602,
subpart B. Therefore, while no
requirement to submit a compliance
report exists in the current regulations,
the proposed language reflects the
existing practice of the Department. The
proposed changes to the regulation

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Federal Register / Vol. 74, No. 150 / Thursday, August 6, 2009 / Proposed Rules
would not impose a new reporting
burden on agencies under OMB Control
Number 1840–0788.
Proposed § 602.31(d) would require
agencies that notify the Department that
they are changing their scope of
recognition to include distance
education or correspondence education
to annually monitor enrollment growth
of the institutions they accredit that
offer distance education. A report would
be required to be sent to the Department
for each institution that reports a 50
percent or higher increase of headcount
enrollment during a fiscal year. The
report must address the capacity of each
institution to accommodate significant
growth in enrollment and to maintain
educational quality; the circumstances
that led to the growth; and any other
applicable information affecting
compliance with the regulation. As
noted in the discussion of proposed
§ 602.19(e), this section of the regulation
would only affect the 15 institutional
accrediting agencies and programmatic
accrediting agencies that accredit

Section 602.32—Procedures for
Department Review of Applications for
Recognition or for Change in Scope,
Compliance Reports, and Increases in
Enrollment
Proposed § 602.32(f) would require
the Department to forward to the agency
a draft analysis of an agency’s
application for recognition that includes
any identified areas of non-compliance,
the proposed recognition
recommendation, and a copy of all
third-party comments that the

Department received. The agency could
then provide a written response to the
draft staff analysis and the third-party
comments. The proposed change would
simplify the language of the current
regulation in that it combines several
paragraphs of the current regulation into
a single paragraph. The current
regulations also require that the
Department invite accrediting agencies
to provide a written response to all draft
analyses developed by Department staff
as well as all third-party comments
received by the Department. Therefore,
the proposed changes would not impose
a new reporting burden on agencies
under OMB Control Number 1840–0788.
Consistent with the discussion above,
the following chart describes the
sections of the proposed regulations
involving information collection, the
information being collected, and the
collection that the Department will
submit to the Office of Management and
Budget for approval and public
comment under the Paperwork
Reduction Act.

Regulatory
section

Information section

Collection

§ 602.15 ...........

Accrediting agencies must demonstrate certain administrative responsibilities,
including maintenance of all accrediting documentation for each institution
from the last full accreditation or preaccreditation review. Previously, agencies were required to maintain this information covering the previous two
accreditation or preaccreditation reviews. Although the current regulation
does not explicitly mention documents relating to substantive change decisions, the requirement for agencies to maintain these documents was covered under the current regulation’s requirement to maintain all documents
related to accrediting decisions and special reports. A substantive change
request would be considered a special report that had to be submitted to
the agency for a decision. Further, an agency’s decision regarding the substantive change request was, in fact, an accreditation decision and was reflected in a decision letter that either allowed the substantive change to be
covered under the agency’s grant of accreditation or denied the request and
did not allow the change to be covered under the agency’s grant of accreditation. Section 496(c)(1)of the HEA.
Agencies must collect data to ensure that the institutions they accredit remain
in compliance with their regulations. This proposed regulation would clarify
the language in the current regulation regarding the data agencies should
collect to ensure that institutions and programs remain in compliance with
their accrediting standards. Section 496(a)(4)(A) of the HEA.
Agencies must monitor the enrollment growth of institutions each year. This
proposed regulation would represent a change in the information that accrediting agencies must collect. It would require that agencies collect information to monitor enrollment growth for the institutions or programs that
they accredit. Section 496(c)(2) of the HEA.
Accrediting agencies that expand their scope to include distance education or
correspondence education by notice to the Secretary must monitor enrollment growth of institutions that offer distance education or correspondence
education and report to the Department, within 30 days, any institution that
experiences enrollment growth of 50 percent or more during a fiscal year.
Section 496(q) of the HEA.

OMB 1840–0788 Although this represents a
reduction of the burden on agencies under
OMB Control Number 1840–0788, since
the agencies already collect the information, the reduced hours for maintaining only
one complete review cycle is negligible.

§ 602.19(b) .......

§ 602.19(c) .......

§ 602.19(e) .......

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freestanding institutions that currently
do not have distance education in their
scope of recognition. Based on the
Department’s previous experience with
institutions that have experienced
significant growth, this provision may
affect no more than 3 institutions per
year. Therefore, the proposed changes
would increase the burden to the 15
affected accrediting agencies by 60
hours under OMB Control Number
1840–0788 if they all add distance
education to their scope of recognition.

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OMB 1840–0788 There is no additional paperwork burden associated with this section of the regulation.

OMB 1840–0788 It is estimated that this regulation would increase the burden to the 61
recognized accrediting agencies by 122
hours.
OMB 1840–0788 It is estimated that this regulation would increase the burden for 15 of
the remaining recognized agencies by 60
hours if all decided to include distance
education in their scope of recognition in
the future.

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Regulatory
section

Information section

Collection

§ 602.24 ...........

Approximately 70 institutions per year will be required to submit a teach-out
plan to their accrediting agency. Most of the institutions and locations that
close offer only one or two programs. For some institutions, the plan will be
very simple: The institution will teach out its students. For other institutions,
preparing a plan may involve doing some research to determine what nearby schools offer similar programs but in most cases, the institution will already know, as the nearby schools will have been their competitors. In a
few cases, more work may be needed to develop a plan. Given the wide
variety of situations, our best estimate is that the average amount of time
needed to complete a plan is 4 hours. Therefore, the total amount of time is
280 hours (70 institutions × 4 hours). Section 496(c)(3) of the HEA.
Section 602.25(f) includes the new statutory concept of an institution’s or program’s right to appeal any adverse accrediting agency action before an appeals panel that is subject to a conflict of interest policy and does not contain members of the underlying decision-making body.

OMB 1840–0788 It is estimated that this regulation would increase the burden on 70 institutions each year for a total of 280
hours.

§ 602.25(f) ........

§ 602.25(h) .......

§ 602.26(b) .......

§ 602.26(d) .......

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§ 602.27(a) .......

§ 602.31(a) .......

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Agencies are already required to have an appeal process; the negligible burden is estimated to be 610 hours, which is based on 61 accrediting agencies × 10 hours. Section 496(a)(6) of the HEA.
Section 602.25(h) includes the new statutory concept of an institution’s or program’s right to review new financial information, if it meets current provisions, before the accrediting agency takes a final adverse action.

The estimated burden is associated primarily with implementing the regulation
in the initial year as agencies establish new procedures. The time is estimated to be 2440 hours, based on 61 accrediting agencies × 40 hours.
Section 496(a)(6) of the HEA.
Agencies must provide a written notice to the Secretary of any final decision
that is considered by the agency to be an adverse action as well as final
decisions withdrawing, suspending, revoking, or terminating an institution’s
or program’s accreditation or preaccreditation. Section 496(c)(7) of the HEA.
Requires agencies to make available to the Secretary and the public a statement regarding the reasons for withdrawing, suspending, revoking, or terminating an institution’s or program’s accreditation or preaccreditation. The
statement must include any comments that affected institutions or programs
want to make with regard to that decision or evidence that the institution or
program was offered the opportunity to provide comments. The proposed
changes provide clarifying language and add that the statement must provide evidence that an institution or program was offered an opportunity to
provide comments if no comments were received. Section 496(c)(7) of the
HEA.
Requires agencies to provide to the Secretary a copy of any annual report it
prepares, an updated directory of its accredited institutions and programs,
any proposed changes in an agency’s policies procedures or accreditation
standards that might alter its scope of recognition or compliance with the
Criteria for Recognition, and a notification if it is changing its scope of recognition to include distance education or correspondence education. Further, if requested by the Secretary, agencies must provide a summary of
the major accrediting activities conducted during the year. It also would require agencies to provide to the Department, if the Secretary requests, any
information regarding an institution’s compliance with its title IV, HEA program responsibilities. Although the proposed changes to the regulation primarily clarify language that is in the current regulation, the changes would
impact the reporting requirement regarding adding distance education or
correspondence education to an agency’s scope of recognition. The proposed regulation would remove the requirement for institutional accrediting
agencies to submit an application to the Department if an agency wished to
add distance education or correspondence education to its scope of recognition and only require agencies to notify the Department that its scope
has been changed to include distance education or correspondence education. Sections 496(a)(4) and 487(a)(15) of the HEA.
Requires accrediting agencies to submit an application for recognition or renewal of recognition at the end of the period of recognition granted by the
Secretary, generally every five years. The application must demonstrate
that the agency complies with the Department’s Criteria for Recognition as
defined in CFR 34 Part 602. The proposed regulation clarifies what documents should be provided with an agency’s application for recognition. Section 496(d) of the HEA.

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OMB 1840–0788 It is estimated that this regulation would increase the burden on 61
accrediting agencies primarily in the first
year of implementation for a total of 610
hours.

OMB 1840–0788 It is estimated that this regulation would increase the burden on 61
accrediting agencies primarily in the first
year of implementation for a total of 2440
hours.

OMB 1840–0788 There is no additional paperwork burden associated with this section of the regulation.
OMB 1840–0788 There is no additional paperwork burden associated with this section of the regulation.

OMB 1840–0788 It is estimated that burden
on the 15 agencies that would be affected
by the proposed regulation would be reduced by 300 hours if all the agencies decided to add distance education or correspondence education to their scope of
recognition.

OMB 1840–0788 There is no additional paperwork burden associated with this section of the regulation.

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Regulatory
section

Information section

Collection

§ 602.31(b) .......

Requires accrediting agencies that wish to expand their scope of recognition
to submit an application to the Secretary. The proposed language would not
place any additional reporting burden on accrediting agencies since the current regulations also require the submission of an application when an
agency seeks to expand its scope of recognition. Section 496(a)(4)(B) of
the HEA.
Requires agencies to provide a compliance report when it has been determined that they do not fully comply with the criteria for recognition or are ineffective in applying those criteria. In order for the Secretary to determine
that agencies are reliable authorities regarding the quality of education or
training offered through their accredited institutions or programs, agencies
must demonstrate that they fully comply with 34 part 602 subpart B. Therefore, while the requirement to submit a compliance report is not identified in
the current regulation, the proposed language would place in writing what
has been the practice of the Department in order to comply with Higher
Education Act, as amended. Sections 496(a) and (c) of the HEA.
Requires agencies that notify the Department that they are changing their
scope of recognition to include distance education or correspondence education to annually monitor enrollment growth of the institutions they accredit
that offer distance education. A report would be required to be sent to the
Department for each institution that reports a 50 percent or higher increase
of headcount enrollment during a fiscal year. The report must address the
capacity of each institution to accommodate significant growth in enrollment
and to maintain educational quality; the circumstances that led to the
growth; and any other applicable information affecting compliance with the
regulation. As noted in the discussion of proposed § 602.19(e) this section
of the regulation would only affect the 15 institutional accrediting agencies
and programmatic accrediting agencies that accredit freestanding institutions that currently do not have distance education in their scope of recognition. Section 496(a)(4)(B) and (q) of the HEA.
Requires the Department to forward to the agency a draft analysis of an
agency’s application for recognition that includes any identified areas of
non-compliance, the proposed recognition recommendation, and a copy of
all third-party comments that the Department received. The agency could
then provide a written response to the draft staff analysis and the third-party
comments. The proposed change would simplify the language of the current
regulation in that it combines several paragraphs of the current regulation
into a single paragraph. The current regulations also require that the Department invite accrediting agencies to provide a written response to all
draft analyses developed by Department staff as well as all third-party comments received by the Department. Section 496(o) of the HEA.

OMB 1840–0788 There is no additional paperwork burden associated with this section of the regulation.

§ 602.31(c) .......

§ 602.31(d) .......

§ 602.32 ...........

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

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• Minimizing the burden on those
who must respond. This includes
exploring the use of appropriate
automated, electronic, mechanical, or
other technological collection
techniques or other forms of information
technology; e.g., permitting electronic
submission of responses.
OMB is required to make a decision
concerning the collections of
information contained in these
proposed regulations between 30 and 60
days after publication of this document
in the Federal Register. Therefore, to
ensure that OMB gives your comments
full consideration, it is important that
OMB receives the comments within 30
days of publication. This does not affect
the deadline for your comments to us on
the proposed regulations.
Intergovernmental Review
This program is not subject to
Executive Order 12372 and the
regulations in 34 CFR part 79.

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OMB 1840–0788 There is no additional paperwork burden associated with this section of the regulation.

OMB 1840–0788 It is estimated that this regulation would increase the burden of 15 of
the remaining recognized agencies by 60
hours if all decided to include distance
education in their scope of recognition in
the future. Based on prior experiences with
institutions experiencing significant growth,
the burden is estimated to apply to 3 institutions per year.

OMB 1840–0788 There is no additional paperwork burden associated with this section of the regulation.

Assessment of Educational Impact
In accordance with section 411 of the
General Education Provisions Act, 20
U.S.C. 1221e-4, the Secretary
particularly requests comments on
whether these proposed regulations
would require transmission of
information that any other agency or
authority of the United States gathers or
makes available.
Electronic Access to This Document
You may view this document, as well
as all other Department of Education
documents published in the Federal
Register, in text or Adobe Portable
Document Format (PDF) on the Internet
at the following site: 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.

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Federal Register / Vol. 74, No. 150 / Thursday, August 6, 2009 / Proposed Rules

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: www.gpoaccess.gov/nara/
index.html.
(Catalog of Federal Domestic Assistance
Number does not apply.)

List of Subjects in 34 CFR 600 and 34
CFR 602
Colleges and universities, Education,
Reporting and recordkeeping
requirements.
Dated: July 28, 2009.
Arne Duncan,
Secretary of Education.

For the reasons discussed in the
preamble, the Secretary proposes to
amend parts 600 and 602 of title 34 of
the Code of Federal Regulations as
follows:

PART 602—THE SECRETARY’S
RECOGNITION OF ACCREDITING
AGENCIES

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

3. The authority citation for part 602
continues to read as follows:

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 the definition of
Correspondence course.
B. Adding in alphabetical order a new
definition of Distance education.
C. Removing the definition of
Telecommunications course.
The addition and revision read as
follows:
§ 600.2

Definitions.

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*

*
*
*
*
Correspondence course: (1) A course
provided by an institution under which
the institution provides instructional
materials, by mail or electronic
transmission, including examinations
on the materials, to students who are
separated from the instructor.
Interaction between the instructor and
student is limited, is not regular and
substantive, and is primarily initiated
by the student. Correspondence courses
are typically self-paced.
(2) If a course is part correspondence
and part residential training, the
Secretary considers the course to be a
correspondence course.
(3) A correspondence course is not
distance education.
*
*
*
*
*
Distance education means education
that uses one or more of the
technologies listed in paragraphs (1)
through (4) of this definition to deliver

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instruction to students who are
separated from the instructor and to
support regular and substantive
interaction between the students and
the instructor, either synchronously or
asynchronously. The technologies may
include—
(1) The internet;
(2) One-way and two-way
transmissions through open broadcast,
closed circuit, cable, microwave,
broadband lines, fiber optics, satellite,
or wireless communications devices;
(3) Audio conferencing; or
(4) Video cassettes, DVDs, and CD–
ROMs, if the cassettes, DVDs, or CD–
ROMs are used in a course in
conjunction with any of the
technologies listed in paragraphs (1)
through (3) of this definition.
*
*
*
*
*

Authority: 20 U.S.C. 1099b, unless
otherwise noted.

4. Section 602.3 is amended by:
A. Adding in alphabetical order a new
definition of Compliance report.
B. Adding in alphabetical order a new
definition of Correspondence education.
C. Adding in alphabetical order a new
definition of Designated Federal
Official.
D. Adding in alphabetical order a new
definition of Direct assessment program.
E. Revising the definition of Distance
education.
F. Adding in alphabetical order a new
definition of Recognition.
G. Revising paragraph (5) of the
definition of Scope of recognition.
H. Revising the definition of Teachout agreement.
I. Adding in alphabetical order a new
definition of Teach-out plan.
The additions and revisions read as
follows:
§ 602.3

What definitions apply to this part?

*

*
*
*
*
Compliance report means a written
report that the Department requires an
agency to file to demonstrate that the
agency has addressed deficiencies
specified in a decision letter from the
senior Department official or the
Secretary.
Correspondence education means:
(1) Education provided through one or
more courses by an institution under
which the institution provides
instructional materials, by mail or
electronic transmission, including
examinations on the materials, to

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students who are separated from the
instructor.
(2) Interaction between the instructor
and the student is limited, is not regular
and substantive, and is primarily
initiated by the student.
(3) Correspondence courses are
typically self-paced.
(4) Correspondence education is not
distance education.
Designated Federal Official means the
Federal officer designated under section
10(f) of the Federal Advisory Committee
Act, 5 U.S.C. Appdx. 1.
Direct assessment program means an
instructional program that, in lieu of
credit hours or clock hours as a measure
of student learning, utilizes direct
assessment of student learning, or
recognizes the direct assessment of
student learning by others, and meets
the conditions of 34 CFR 668.10. For
title IV, HEA purposes, the institution
must obtain approval for the direct
assessment program from the Secretary
under 34 CFR 668.10(g) or (h) as
applicable. As part of that approval, the
accrediting agency must—
(1) Evaluate the program(s) and
include them in the institution’s grant of
accreditation or preaccreditation; and
(2) Review and approve the
institution’s claim of each direct
assessment program’s equivalence in
terms of credit or clock hours.
Distance education means education
that uses one or more of the
technologies listed in paragraphs (1)
through (4) of this definition to deliver
instruction to students who are
separated from the instructor and to
support regular and substantive
interaction between the students and
the instructor, either synchronously or
asynchronously. The technologies may
include—
(1) The internet;
(2) One-way and two-way
transmissions through open broadcast,
closed circuit, cable, microwave,
broadband lines, fiber optics, satellite,
or wireless communications devices;
(3) Audio conferencing; or
(4) Video cassettes, DVDs, and CD–
ROMs, if the cassettes, DVDs, or CD–
ROMs are used in a course in
conjunction with any of the
technologies listed in paragraphs (1)
through (3) of this definition.
*
*
*
*
*
Recognition means an unappealed
determination by the senior Department
official under § 602.36, or a
determination by the Secretary on
appeal under § 602.37, that an
accrediting agency complies with the
criteria for recognition listed in subpart
B of this part and that the agency is

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effective in its application of those
criteria. A grant of recognition to an
agency as a reliable authority regarding
the quality of education or training
offered by institutions or programs it
accredits remains in effect for the term
granted except upon a determination
made in accordance with subpart C of
this part that the agency no longer
complies with the subpart B criteria or
that it has become ineffective in its
application of those criteria.
*
*
*
*
*
Scope of recognition or scope * * *
(5) Coverage of accrediting activities
related to distance education or
correspondence education.
*
*
*
*
*
Teach-out agreement means a written
agreement between institutions that
provides for the equitable treatment of
students and a reasonable opportunity
for students to complete their program
of study if an institution, or an
institutional location that provides one
hundred percent of at least one program
offered, ceases to operate before all
enrolled students have completed their
program of study.
Teach-out plan means a written plan
developed by an institution that
provides for the equitable treatment of
students if an institution, or an
institutional location that provides one
hundred 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.
*
*
*
*
*
5. Section 602.15 is amended by:
A. Revising paragraph (a)(2).
B. In paragraph (b)(1), removing the
word ‘‘two’’ and removing the letter ‘‘s’’
from the word ‘‘reviews’’ the first time
it appears.
C. Revising paragraph (b)(2).
The revisions read as follows:
§ 602.15 Administrative and fiscal
responsibilities.

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*

*
*
*
*
(a) * * *
(2) Competent and knowledgeable
individuals, qualified by education and
experience in their own right and
trained by the agency on their
responsibilities, as appropriate for their
roles, regarding the agency’s standards,
policies, and procedures, to conduct its
on-site evaluations, apply or establish
its policies, and make its accrediting
and preaccrediting decisions, including,
if applicable to the agency’s scope, their
responsibilities regarding distance
education and correspondence
education;
*
*
*
*
*

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(b) * * *
(2) All decisions made throughout an
institution’s or program’s affiliation
with the agency regarding the
accreditation and preaccreditation of
any institution or program and
substantive changes, including all
correspondence that is significantly
related to those decisions.
*
*
*
*
*
6. Section 602.16 by amended by:
A. Redesignating paragraphs (c) and
(d) as paragraphs (d) and (e),
respectively.
B. Revising paragraph (a)(1)(i).
C. Adding new paragraphs (c) and (f).
The additions and revision read as
follows:
§ 602.16 Accreditation and
preaccreditation standards.

(a) * * *
(1) * * *
(i) Success with respect to student
achievement in relation to the
institution’s mission, which may
include different standards for different
institutions or programs, as established
by the institution, including, as
appropriate, consideration of State
licensing examinations, course
completion, and job placement rates.
*
*
*
*
*
(c) If the agency has or seeks to
include within its scope of recognition
the evaluation of the quality of
institutions or programs offering
distance education or correspondence
education, the agency’s standards must
effectively address the quality of an
institution’s distance education or
correspondence education in the areas
identified in paragraph (a)(1) of this
section. The agency is not required to
have separate standards, procedures, or
policies for the evaluation of distance
education or correspondence education.
*
*
*
*
*
(f) Nothing in paragraph (a) of this
section restricts—
(1) An accrediting agency from
setting, with the involvement of its
members, and applying accreditation
standards for or to institutions or
programs that seek review by the
agency; or
(2) An institution from developing
and using institutional standards to
show its success with respect to student
achievement, which achievement may
be considered as part of any
accreditation review.
*
*
*
*
*
7. Section 602.17 is amended by:
A. In paragraph (e), removing the
word ‘‘and’’ at the end of the paragraph.
B. In paragraph (f), removing the
punctuation ‘‘.’’ and adding, in its place,
the words ‘‘; and’’.

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39525

C. Adding a new paragraph (g).
The addition reads as follows:
§ 602.17 Application of standards in
reaching an accrediting decision.

*

*
*
*
*
(g) Requires institutions that offer
distance education or correspondence
education to have processes in place
through which the institution
establishes that the student who
registers in a distance education or
correspondence education course or
program is the same student who
participates in and completes the course
or program and receives the academic
credit. The agency meets this
requirement if it—
(1) Requires institutions to verify the
identity of a student who participates in
class or coursework by using, at the
option of the institution, methods such
as—
(i) A secure login and pass code;
(ii) Proctored examinations; and
(iii) New or other technologies and
practices that are effective in verifying
student identification; and
(2) Makes clear in writing that
institutions must use processes that
protect student privacy and notify
students of any projected additional
student charges associated with the
verification of student identity at the
time of registration or enrollment.
*
*
*
*
*
8. Section 602.18 is amended by:
A. Revising the introductory text.
B. Redesignating paragraphs (a), (b),
and (c) as paragraphs (b), (c), and (d),
respectively.
C. In newly redesignated paragraph
(c), removing the word ‘‘and’’ at the end
of the paragraph.
D. In newly redesignated paragraph
(d), removing the punctuation ‘‘.’’ and
adding, in its place, the words ‘‘; and’’.
E. Adding new paragraphs (a) and (e).
The additions and revision read as
follows:
§ 602.18 Ensuring consistency in decisionmaking.

The agency must consistently apply
and enforce standards that respect the
stated mission of the institution,
including religious mission, and that
ensure that the education or training
offered by an institution or program,
including any offered through distance
education or correspondence education,
is of sufficient quality to achieve its
stated objective for the duration of any
accreditation or preaccreditation period
granted by the agency. The agency
meets this requirement if the agency—
(a) Has written specification of the
requirements for accreditation and
preaccreditation that include clear

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§ 602.19 Monitoring and reevaluation of
accredited institutions and programs.

B. In paragraph (a)(2)(iv), removing
the words ‘‘courses or’’, adding the
words ‘‘of study’’ after the word
‘‘programs’’ the first time it appears, and
removing the word ‘‘above’’ and adding,
in its place, the words ‘‘different from’’.
C. Revising paragraph (a)(2)(vii).
D. Adding new paragraphs (a)(2)(viii),
(a)(2)(ix), and (a)(2)(x).
E. Adding a new paragraph (a)(3).
F. Revising paragraph (b).
G. Revising paragraph (c),
introductory text.
H. In paragraph (c)(2), adding the
words ‘‘a representative sample of’’
immediately after the words ‘‘visits to’’.
The additions and revisions read as
follows:

*

§ 602.22

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standards for an institution or program
to be accredited;
*
*
*
*
*
(e) Provides the institution or program
with a detailed written report that
clearly identifies any deficiencies in the
institution’s or program’s compliance
with the agency’s standards.
*
*
*
*
*
9. Section 602.19 is amended by:
A. Revising paragraph (b).
B. Adding new paragraphs (c), (d),
and (e).
The revision and additions read as
follows:

*
*
*
*
(b) The agency must demonstrate it
has, and effectively applies, a set of
monitoring and evaluation approaches
that enables the agency to identify
problems with an institution’s or
program’s continued compliance with
agency standards and that takes into
account institutional or program
strengths and stability. These
approaches must include periodic
reports, and collection and analysis of
key data and indicators, identified by
the agency, including, but not limited
to, fiscal information and measures of
student achievement, consistent with
the provisions of § 602.16(f). This
provision does not require institutions
or programs to provide annual reports
on each specific accreditation criterion.
(c) Each agency must monitor overall
growth of the institutions or programs it
accredits and, at least annually, collect
headcount enrollment data from those
institutions or programs.
(d) Institutional accrediting agencies
must monitor the growth of programs at
institutions experiencing significant
enrollment growth, as reasonably
defined by the agency.
(e) Any agency that has notified the
Secretary of a change in its scope in
accordance with § 602.27(a)(5) must
monitor the headcount enrollment of
each institution it has accredited that
offers distance education or
correspondence education. If any such
institution has experienced an increase
in headcount enrollment of 50 percent
or more within one institutional fiscal
year, the agency must report that
information to the Secretary within 30
days of acquiring such data.
*
*
*
*
*
10. Section 602.22 is amended by:
A. In paragraph (a)(2)(iii), removing
the words ‘‘, in either content’’ and
adding, in their place, the words ‘‘from
the existing offerings of educational
programs,’’.

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Substantive change.

(a) * * *
(2) * * *
(vii) If the agency’s accreditation of an
institution enables the institution to
seek eligibility to participate in title IV,
HEA programs, the entering into a
contract under which an institution or
organization not certified to participate
in the title IV, HEA programs offers
more than 25 percent of one or more of
the accredited institution’s educational
programs.
(viii)(A) If the agency’s accreditation
of an institution enables it to seek
eligibility to participate in title IV, HEA
programs, the establishment of an
additional location at which the
institution offers at least 50 percent of
an educational program. The addition of
such a location must be approved by the
agency in accordance with paragraph (c)
of this section unless the accrediting
agency determines, and issues a written
determination stating that the
institution has—
(1) Successfully completed at least
one cycle of accreditation of maximum
length offered by the agency and one
renewal, or has been accredited for at
least ten years;
(2) At least three additional locations
that the agency has approved; and
(3) Met criteria established by the
agency indicating sufficient capacity to
add additional locations without
individual prior approvals, including at
a minimum satisfactory evidence of a
system to ensure quality across a
distributed enterprise that includes—
(i) Clearly identified academic
control;
(ii) Regular evaluation of the
locations;
(iii) Adequate faculty, facilities,
resources, and academic and student
support systems;
(iv) Financial stability; and
(v) Long-range planning for
expansion.

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(B) The agency’s procedures for
approval of an additional location,
pursuant to paragraph (a)(2)(viii)(A) of
this section, must require timely
reporting to the agency of every
additional location established under
this approval.
(C) Each agency determination or
redetermination to preapprove an
institution’s addition of locations under
paragraph (a)(2)(viii)(A) of this section
may not exceed five years.
(D) The agency may not preapprove
an institution’s addition of locations
under paragraph (a)(2)(viii)(A) of this
section after the institution undergoes a
change in ownership resulting in a
change in control as defined in 34 CFR
600.31 until the institution
demonstrates that it meets the
conditions for the agency to preapprove
additional locations described in this
paragraph.
(E) The agency must have an effective
mechanism for conducting, at
reasonable intervals, visits to a
representative sample of additional
locations approved under paragraph
(a)(2)(viii)(A) of this section.
(ix) The acquisition of any other
institution or any program or location of
another institution.
(x) The addition of a permanent
location at a site at which the institution
is conducting a teach-out for students of
another institution that has ceased
operating before all students have
completed their program of study.
(3) The agency’s substantive change
policy must define when the changes
made or proposed by an institution are
or would be sufficiently extensive to
require the agency to conduct a new
comprehensive evaluation of that
institution.
(b) The agency may determine the
procedures it uses to grant prior
approval of the substantive change.
However, these procedures must specify
an effective date, which is not
retroactive, on which the change is
included in the program’s or
institution’s accreditation. An agency
may designate the date of a change in
ownership as the effective date of its
approval of that substantive change if
the accreditation decision is made
within 30 days of the change in
ownership. Except as provided in
paragraph (c) of this section, these
procedures may, but need not, require a
visit by the agency.
(c) Except as provided in paragraph
(a)(2)(viii)(A) of this section, if the
agency’s accreditation of an institution
enables the institution to seek eligibility
to participate in title IV, HEA programs,
the agency’s procedures for the approval
of an additional location where at least

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50 percent of an educational program is
offered must provide for a
determination of the institution’s fiscal
and administrative capacity to operate
the additional location. In addition, the
agency’s procedures must include—
*
*
*
*
*
11. Section 602.23 is amended by:
A. Revising paragraph (a) introductory
text.
B. Revising paragraph (c)(1).
The revisions read as follows:
§ 602.23 Operating procedures all
agencies must have.

(a) The agency must maintain and
make available to the public written
materials describing—
*
*
*
*
*
(c) * * *
(1) Review in a timely, fair, and
equitable manner any complaint it
receives against an accredited
institution or program that is related to
the agency’s standards or procedures.
The agency may not complete its review
and make a decision regarding a
complaint unless, in accordance with
published procedures, it ensures that
the institution or program has sufficient
opportunity to provide a response to the
complaint;
*
*
*
*
*
12. Section 602.24 is amended by:
A. Revising paragraph (c).
B. Adding new paragraphs (d) and (e).
The addition and revision read as
follows:
§ 602.24 Additional procedures certain
institutional accreditors must have.

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*

*
*
*
*
(c) Teach-out plans and agreements.
(1) The agency must require an
institution it accredits or preaccredits to
submit a teach-out plan to the agency
for approval upon the occurrence of any
of the following events:
(i) The Secretary notifies the agency
that the Secretary has initiated an
emergency action against an institution,
in accordance with section 487(c)(1)(G)
of the HEA, or an action to limit,
suspend, or terminate an institution
participating in any title IV, HEA
program, in accordance with section
487(c)(1)(F) of the HEA, and that a
teach-out plan is required.
(ii) The agency acts to withdraw,
terminate, or suspend the accreditation
or preaccreditation of the institution.
(iii) The institution notifies the
agency that it intends to cease
operations entirely or close a location
that provides one hundred percent of at
least one program.
(iv) A State licensing or authorizing
agency notifies the agency that an
institution’s license or legal

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authorization to provide an educational
program has been or will be revoked.
(2) The agency must evaluate the
teach-out plan to ensure it provides for
the equitable treatment of students
under criteria established by the agency,
specifies additional charges, if any, and
provides for notification to the students
of any additional charges.
(3) If the agency approves a teach-out
plan that includes a program that is
accredited by another recognized
accrediting agency, it must notify that
accrediting agency of its approval.
(4) The agency may require an
institution it accredits or preaccredits to
enter into a teach-out agreement as part
of its teach-out plan.
(5) The agency must require an
institution it accredits or preaccredits
that enters into a teach-out agreement,
either on its own or at the request of the
agency, to submit that teach-out
agreement for approval. The agency may
approve the teach-out agreement only if
the agreement is between institutions
that are accredited or preaccredited by
a nationally recognized accrediting
agency, is consistent with applicable
standards and regulations, and provides
for the equitable treatment of students
by ensuring that—
(i) The teach-out institution has the
necessary experience, resources, and
support services to—
(A) Provide an educational program
that is of acceptable quality and
reasonably similar in content, structure,
and scheduling to that provided by the
institution that is ceasing operations
either entirely or at one of its locations;
and
(B) Remain stable, carry out its
mission, and meet all obligations to
existing students; and
(ii) The teach-out institution
demonstrates that it can provide
students access to the program and
services without requiring them to move
or travel substantial distances and that
it will provide students with
information about additional charges, if
any.
(d) Closed institution. If an institution
the agency accredits or preaccredits
closes without a teach-out plan or
agreement, the agency must work with
the Department and the appropriate
State agency, to the extent feasible, to
assist students in finding reasonable
opportunities to complete their
education without additional charges.
(e) Transfer of credit policies. The
accrediting agency must confirm, as part
of its review for initial accreditation or
preaccreditation, or renewal of
accreditation, that the institution has
transfer of credit policies that—

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(1) Are publicly disclosed in
accordance with § 668.43(x); and
(2) Include a statement of the criteria
established by the institution regarding
the transfer of credit earned at another
institution of higher education.
*
*
*
*
*
13. Section 602.25 is revised to read
as follows:
§ 602.25

Due process.

The agency must demonstrate that the
procedures it uses throughout the
accrediting process satisfy due process.
The agency meets this requirement if
the agency does the following:
(a) Provides adequate written
specification of its requirements,
including clear standards, for an
institution or program to be accredited
or preaccredited.
(b) Uses procedures that afford an
institution or program a reasonable
period of time to comply with the
agency’s requests for information and
documents.
(c) Provides written specification of
any deficiencies identified at the
institution or program examined.
(d) Provides sufficient opportunity for
a written response by an institution or
program regarding any deficiencies
identified by the agency, to be
considered by the agency within a
timeframe determined by the agency,
and before any adverse action is taken.
(e) Notifies the institution or program
in writing of any adverse accrediting
action or an action to place the
institution or program on probation or
show cause. The notice describes the
basis for the action.
(f) Provides an opportunity, upon
written request of an institution or
program, for the institution or program
to appeal any adverse action prior to the
action becoming final.
(1) The appeal must take place at a
hearing before an appeals panel that—
(i) May not include current members
of the agency’s decision-making body
that took the initial adverse action;
(ii) Is subject to a conflict of interest
policy; and
(iii) Affirms, amends, or reverses the
adverse action, which will be
implemented by the appeals panel or by
the original decision-making body, at
the agency’s option. If the original
decision-making body is responsible for
implementing the appeals panel’s
decision, that body must act regarding
the institution’s or program’s
accreditation status in a manner
consistent with the appeals panel’s
decision.
(2) The agency must recognize the
right of the institution or program to
employ counsel to represent the

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institution or program during its appeal,
including to make any presentation that
the agency permits the institution or
program to make on its own during the
appeal.
(g) The agency notifies the institution
or program in writing of the result of its
appeal and the basis for that result.
(h)(1) The agency must provide for a
process, in accordance with written
procedures, through which an
institution or program may, before the
agency reaches a final adverse action
decision, seek review of new financial
information if all of the following
conditions are met:
(i) The financial information was
unavailable to the institution or program
until after the decision subject to appeal
was made.
(ii) The financial information is
significant and bears materially on the
financial deficiencies identified by the
agency. The criteria of significance and
materiality are determined by the
agency.
(iii) The only remaining deficiency
cited by the agency in support of a final
adverse action decision is the
institution’s or program’s failure to meet
an agency standard pertaining to
finances.
(2) An institution or program may
seek the review of new financial
information described in paragraph
(h)(1) of this section only once and any
determination by the agency made with
respect to that review does not provide
a basis for an appeal.
(Authority: 20 U.S.C. 1099b)

14. Section 602.26 is amended by:
A. In paragraph (b)(2), removing the
punctuation ‘‘;’’ and adding, in its place,
the punctuation ‘‘.’’.
B. Adding a new paragraph (b)(3).
C. In paragraph (c), removing the
words ‘‘(b)(1) and (b)(2)’’ and adding, in
their place, the words ‘‘(b)(1), (b)(2), and
(b)(3)’’.
D. Revising paragraph (d).
The addition and revision read as
follows:
§ 602.26 Notification of accrediting
decisions.

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*

*
*
*
*
(b) * * *
(3) A final decision to take any other
adverse action, as defined by the
agency, not listed in paragraph (b)(2) of
this section;
*
*
*
*
*
(d) For any decision listed in
paragraph (b)(2) of this section, makes
available to the Secretary, the
appropriate State licensing or
authorizing agency, and the public, no
later than 60 days after the decision, a

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brief statement summarizing the reasons
for the agency’s decision and the official
comments that the affected institution
or program may wish to make with
regard to that decision, or evidence that
the affected institution has been offered
the opportunity to provide official
comment;
*
*
*
*
*
15. Section 602.27 is revised to read
as follows:
§ 602.27 Other information an agency
must provide the Department.

(a) The agency must submit to the
Department—
(1) A copy of any annual report it
prepares;
(2) A copy, updated annually, of its
directory of accredited and
preaccredited institutions and programs;
(3) A summary of the agency’s major
accrediting activities during the
previous year (an annual data
summary), if requested by the Secretary
to carry out the Secretary’s
responsibilities related to this part;
(4) Any proposed change in the
agency’s policies, procedures, or
accreditation or preaccreditation
standards that might alter its—
(i) Scope of recognition, except as
provided in paragraph (a)(5) of this
section; or
(ii) Compliance with the criteria for
recognition;
(5) Notification that the agency has
expanded its scope of recognition to
include distance education or
correspondence education as provided
in section 496(a)(4)(B)(i)(I) of the HEA.
Such an expansion of scope is effective
on the date the Department receives the
notification;
(6) The name of any institution or
program it accredits that the agency has
reason to believe is failing to meet its
title IV, HEA program responsibilities or
is engaged in fraud or abuse, along with
the agency’s reasons for concern about
the institution or program; and
(7) If the Secretary requests,
information that may bear upon an
accredited or preaccredited institution’s
compliance with its title IV, HEA
program responsibilities, including the
eligibility of the institution or program
to participate in title IV, HEA programs.
(b) If an agency has a policy regarding
notification to an institution or program
of contact with the Department in
accordance with paragraph (a)(6) or
(a)(7) of this section, it must provide for
a case-by-case review of the
circumstances surrounding the contact,
and the need for the confidentiality of
that contact. Upon a specific request by
the Department, the agency must
consider that contact confidential.

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(Authority: 20 U.S.C. 1099b)

16. Subpart C is revised to read as
follows:
Subpart C—The Recognition Process
Application and Review by Department Staff
Sec.
602.30 Activities covered by recognition
procedures.
602.31 Agency submissions to the
Department.
602.32 Procedures for Department review of
applications for recognition or for change
in scope, compliance reports, and
increases in enrollment.
602.33 Procedures for review of agencies
during the period of recognition.
Review by the National Advisory Committee
on Institutional Quality and Integrity
602.34 Advisory Committee meetings.
602.35 Responding to the Advisory
Committee’s recommendation.
Review and Decision by the Senior
Department Official
602.36 Senior Department official’s
decision.
Appeal Rights and Procedures
602.37 Appealing the senior Department
official’s decision to the Secretary.
602.38 Contesting the Secretary’s final
decision to deny, limit, suspend, or
terminate an agency’s recognition.

Subpart C—The Recognition Process
Application and Review by Department
Staff
§ 602.30 Activities covered by recognition
procedures.

Recognition proceedings are
administrative actions taken on any of
the following matters:
(a) Applications for initial or
continued recognition submitted under
§ 602.31(a).
(b) Applications for an expansion of
scope submitted under § 602.31(b).
(c) Compliance reports submitted
under § 602.31(c).
(d) Reviews of agencies that have
expanded their scope of recognition by
notice, following receipt by the
Department of information of an
increase in headcount enrollment
described in § 602.19(e).
(e) Staff analyses identifying areas of
non-compliance based on a review
conducted under § 602.33. (Authority:
20 U.S.C. 1099b)
§ 602.31 Agency submissions to the
Department.

(a) Applications for recognition or
renewal of recognition. An accrediting
agency seeking initial or continued
recognition must submit a written
application to the Secretary. Each
accrediting agency must submit an
application for continued recognition at

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least once every five years, or within a
shorter time period specified in the final
recognition decision. The application
must consist of—
(1) A statement of the agency’s
requested scope of recognition;
(2) Evidence, including
documentation, that the agency
complies with the criteria for
recognition listed in subpart B of this
part and effectively applies those
criteria; and
(3) Evidence, including
documentation, of how an agency that
includes or seeks to include distance
education or correspondence education
in its scope of recognition applies its
standards in evaluating programs and
institutions it accredits that offer
distance education or correspondence
education.
(b) Applications for expansions of
scope. An agency seeking an expansion
of scope by application must submit a
written application to the Secretary. The
application must—
(1) Specify the scope requested;
(2) Include documentation of
experience in accordance with
§ 602.12(b); and
(3) Provide copies of any relevant
standards, policies, or procedures
developed and applied by the agency
and documentation of the application of
these standards, policies, or procedures.
(c) Compliance reports. If an agency is
required to submit a compliance report,
it must do so within 30 days following
the end of the period for achieving
compliance as specified in the decision
of the senior Department official or
Secretary, as applicable.
(d) Review following an increase in
headcount enrollment. If an agency that
has notified the Secretary in writing of
its change in scope to include distance
education or correspondence education
in accordance with § 602.27(a)(5)
reports an increase in headcount
enrollment in accordance with
§ 602.19(e) for an institution it accredits,
or if the Department notifies the agency
of such an increase at one of the
agency’s accredited institutions, the
agency must, within 45 days of
reporting the increase or receiving
notice of the increase from the
Department, as applicable, submit a
report explaining—
(1) How the agency evaluates the
capacity of the institutions or programs
it accredits to accommodate significant
growth in enrollment and to maintain
educational quality;
(2) The specific circumstances
regarding the growth at the institution(s)
or programs(s) that triggered the review
and the results of any evaluation
conducted by the agency; and

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(3) Any other information that the
agency deems appropriate to
demonstrate the effective application of
the criteria for recognition or that the
Department may require.
(e) Consent to sharing of information.
By submitting an application for
recognition, the agency authorizes
Department staff throughout the
application process and during any
period of recognition—
(1) To observe its site visits to one or
more of the institutions or programs it
accredits or preaccredits, on an
announced or unannounced basis;
(2) To visit locations where agency
activities such as training, review and
evaluation panel meetings, and decision
meetings take place, on an announced
or unannounced basis;
(3) To obtain copies of all documents
the staff deems necessary to complete its
review of the agency; and
(4) To gain access to agency records,
personnel, and facilities.
(f) Public availability of agency
records obtained by the Department. (1)
The Secretary’s processing and decision
making on requests for public disclosure
of agency materials reviewed under this
part are governed by the Freedom of
Information Act, 5 U.S.C. 552; the Trade
Secrets Act, 18 U.S.C. 1905; the Privacy
Act of 1974, as amended, 5 U.S.C 552a;
the Federal Advisory Committee Act, 5
U.S.C. Appdx. 1; and all other
applicable laws. In recognition
proceedings, agencies may—
(i) Redact information that would
identify individuals or institutions that
is not essential to the Department’s
review of the agency;
(ii) Make a good faith effort to
designate all business information
within agency submissions that the
agency believes would be exempt from
disclosure under exemption 4 of the
Freedom of Information Act (FOIA), 5
U.S.C. § 552(b)(4). A blanket designation
of all information contained within a
submission, or of a category of
documents, as meeting this exemption
will not be considered a good faith effort
and will be disregarded;
(iii) Identify any other material the
agency believes would be exempt from
public disclosure under FOIA, the
factual basis for the request, and any
legal basis the agency has identified for
withholding the document from
disclosure; and
(iv) Ensure documents submitted are
only those required for Department
review or as requested by Department
officials.
(2) The Secretary processes FOIA
requests in accordance with 34 CFR part
5 and makes all documents provided to

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the Advisory Committee available to the
public.
(Authority: 20 U.S.C. 1099b)
§ 602.32 Procedures for Department
review of applications for recognition or for
change in scope, compliance reports, and
increases in enrollment.

(a) After receipt of an agency’s
application for initial or continued
recognition, or change in scope, or an
agency’s compliance report, or an
agency’s report submitted under
§ 602.31(d), Department staff publishes
a notice of the agency’s application or
report in the Federal Register inviting
the public to comment on the agency’s
compliance with the criteria for
recognition and establishing a deadline
for receipt of public comment.
(b) The Department staff analyzes the
agency’s application for initial or
renewal of recognition, compliance
report, or report submitted under
§ 602.31(d) to determine whether the
agency satisfies the criteria for
recognition, taking into account all
available relevant information
concerning the compliance of the
agency with those criteria and in the
agency’s effectiveness in applying the
criteria. The analysis of an application
for recognition and, as appropriate, of a
compliance report, or of a report
required under § 602.31(d), includes—
(1) Observations from site visit(s), on
an announced or unannounced basis, to
the agency or to a location where agency
activities such as training, review and
evaluation panel meetings, and decision
meetings take place and to one or more
of the institutions or programs it
accredits or preaccredits;
(2) Review of the public comments
and other third-party information the
Department staff receives by the
established deadline, and the agency’s
responses to the third-party comments,
as appropriate, as well as any other
information Department staff assembles
for purposes of evaluating the agency
under this part; and
(3) Review of complaints or legal
actions involving the agency.
(c) The Department staff analyzes the
materials submitted in support of an
application for expansion of scope to
ensure that the agency has the requisite
experience, policies that comply with
subpart B of this part, capacity, and
performance record to support the
request.
(d) Department staff’s evaluation of an
agency may also include a review of
information directly related to
institutions or programs accredited or
preaccredited by the agency relative to
their compliance with the agency’s
standards, the effectiveness of the

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standards, and the agency’s application
of those standards.
(e) If, at any point in its evaluation of
an agency seeking initial recognition,
Department staff determines that the
agency fails to demonstrate compliance
with the basic eligibility requirements
in §§ 602.10 through 602.13, the staff—
(1) Returns the agency’s application
and provides the agency with an
explanation of the deficiencies that
caused staff to take that action; and
(2) Recommends that the agency
withdraw its application and reapply
when the agency can demonstrate
compliance.
(f) Except with respect to an
application that has been returned or is
withdrawn under paragraph (e) of this
section, when Department staff
completes its evaluation of the agency,
the staff—
(1) Prepares a written draft analysis of
the agency;
(2) Sends the draft analysis including
any identified areas of non-compliance
and a proposed recognition
recommendation, and all supporting
documentation, including all third-party
comments the Department received by
the established deadline, to the agency;
(3) Invites the agency to provide a
written response to the draft analysis
and proposed recognition
recommendation and third-party
comments, specifying a deadline that
provides at least 30 days for the
agency’s response;
(4) Reviews the response to the draft
analysis the agency submits, if any, and
prepares the written final analysis. The
final analysis includes a recognition
recommendation to the senior
Department official, as the Department
staff deems appropriate, including, but
not limited to, a recommendation to
approve, deny, limit, suspend, or
terminate recognition, require the
submission of a compliance report and
continue recognition pending a final
decision on compliance, approve or
deny a request for expansion of scope,
or revise or affirm the scope of the
agency; and
(5) Provides to the agency, no later
than seven days before the Advisory
Committee meeting, the final staff
analysis and any other available
information provided to the Advisory
Committee under § 602.34(c).
(g) The agency may request that the
Advisory Committee defer acting on an
application at that Advisory Committee
meeting if Department staff fails to
provide the agency with the materials
described, and within the timeframes
provided, in paragraphs (f)(3) and (f)(5)
of this section. If the Department staff’s
failure to send the materials in

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accordance with the timeframe
described in paragraph (f)(3) or (f)(5) of
this section is due to the failure of the
agency to submit reports to the
Department, other information the
Secretary requested, or its response to
the draft analysis, by the deadline
established by the Secretary, the agency
forfeits its right to request a deferral of
its application.
(Authority: 20 U.S.C. 1099b)
§ 602.33 Procedures for review of
agencies during the period of recognition.

(a) Department staff may review the
compliance of a recognized agency with
the criteria for recognition at any time—
(1) At the request of the Advisory
Committee; or
(2) Based on any information that, as
determined by Department staff, appears
credible and raises issues relevant to
recognition.
(b) The review may include, but need
not be limited to, any of the activities
described in § 602.32(b) and (d).
(c) If, in the course of the review, and
after provision to the agency of the
documentation concerning the inquiry
and consultation with the agency,
Department staff notes that one or more
deficiencies may exist in the agency’s
compliance with the criteria for
recognition or in the agency’s effective
application of those criteria, it—
(1) Prepares a written draft analysis of
the agency’s compliance with the
criteria of concern. The draft analysis
reflects the results of the review, and
includes a recommendation regarding
what action to take with respect to
recognition. Possible recommendations
include, but are not limited to, a
recommendation to limit, suspend, or
terminate recognition, or require the
submission of a compliance report and
to continue recognition pending a final
decision on compliance;
(2) Sends the draft analysis including
any identified areas of non-compliance,
and a proposed recognition
recommendation, and all supporting
documentation to the agency; and
(3) Invites the agency to provide a
written response to the draft analysis
and proposed recognition
recommendation, specifying a deadline
that provides at least 30 days for the
agency’s response.
(d) If, after review of the agency’s
response to the draft analysis,
Department staff concludes that the
agency has demonstrated compliance
with the criteria for recognition, the staff
notifies the agency in writing of the
results of the review. If the review was
requested by the Advisory Committee,
staff also provides the Advisory

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Committee with the results of the
review.
(e) If, after review of the agency’s
response to the draft analysis,
Department staff concludes that the
agency has not demonstrated
compliance, the staff—
(1) Notifies the agency that the draft
analysis will be finalized for
presentation to the Advisory Committee;
(2) Publishes a notice in the Federal
Register including, if practicable, an
invitation to the public to comment on
the agency’s compliance with the
criteria in question and establishing a
deadline for receipt of public comment;
(3) Provides the agency with a copy of
all public comments received and, if
practicable, invites a written response
from the agency;
(4) Finalizes the staff analysis as
necessary to reflect its review of any
agency response and any public
comment received; and
(5) Provides to the agency, no later
than seven days before the Advisory
Committee meeting, the final staff
analysis and a recognition
recommendation and any other
information provided to the Advisory
Committee under § 602.34(c).
(f) The Advisory Committee reviews
the matter in accordance with § 602.34.
(Authority: 20 U.S.C. 1099b)

Review by the National Advisory
Committee on Institutional Quality and
Integrity
§ 602.34

Advisory Committee meetings.

(a) Department staff submits a
proposed schedule to the Chairperson of
the Advisory Committee based on
anticipated completion of staff analyses.
(b) The Chairperson of the Advisory
Committee establishes an agenda for the
next meeting and, in accordance with
the Federal Advisory Committee Act,
presents it to the Designated Federal
Official for approval.
(c) Before the Advisory Committee
meeting, Department staff provides the
Advisory Committee with—
(1) The agency’s application for
recognition or for expansion of scope,
the agency’s compliance report, or the
agency’s report submitted under
§ 602.31(d), and supporting
documentation;
(2) The final Department staff analysis
of the agency developed in accordance
with § 602.32 or § 602.33, and any
supporting documentation;
(3) At the request of the agency, the
agency’s response to the draft analysis;
(4) Any written third-party comments
the Department received about the
agency on or before the established
deadline;

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(5) Any agency response to third-party
comments; and
(6) Any other information Department
staff relied upon in developing its
analysis.
(d) At least 30 days before the
Advisory Committee meeting, the
Department publishes a notice of the
meeting in the Federal Register inviting
interested parties, including those who
submitted third-party comments
concerning the agency’s compliance
with the criteria for recognition, to make
oral presentations before the Advisory
Committee.
(e) The Advisory Committee considers
the materials provided under paragraph
(c) of this section in a public meeting
and invites Department staff, the
agency, and other interested parties to
make oral presentations during the
meeting. A transcript is made of all
Advisory Committee meetings.
(f) The written motion adopted by the
Advisory Committee regarding each
agency’s recognition will be made
available during the Advisory
Committee meeting. The Department
will provide each agency, upon request,
with a copy of the motion on
recognition at the meeting. Each agency
that was reviewed will be sent an
electronic copy of the motion relative to
that agency as soon as practicable after
the meeting.
(g) After each meeting of the Advisory
Committee at which a review of
agencies occurs, the Advisory
Committee forwards to the senior
Department official its recommendation
with respect to each agency, which may
include, but is not limited to, a
recommendation to approve, deny,
limit, suspend, or terminate recognition,
to grant or deny a request for expansion
of scope, to revise or affirm the scope of
the agency, or to require the agency to
submit a compliance report and to
continue recognition pending a final
decision on compliance.
(Authority: 20 U.S.C. 1099b)

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§ 602.35 Responding to the Advisory
Committee’s recommendation.

(a) Within ten days following the
Advisory Committee meeting, the
agency and Department staff may
submit written comments to the senior
Department official on the Advisory
Committee’s recommendation. The
agency must simultaneously submit a
copy of its written comments, if any, to
Department staff. Department staff must
simultaneously submit a copy of its
written comments, if any, to the agency.
(b) Comments must be limited to—
(1) Any Advisory Committee
recommendation that the agency or

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Department staff believes is not
supported by the record;
(2) Any incomplete Advisory
Committee recommendation based on
the agency’s application; and
(3) The inclusion of any
recommendation or draft proposed
decision for the senior Department
official’s consideration.
(c)(1) Neither the Department staff nor
the agency may submit additional
documentary evidence with its
comments unless the Advisory
Committee’s recognition
recommendation proposes finding the
agency noncompliant with, or
ineffective in its application of, a
criterion or criteria for recognition not
identified in the final Department staff
analysis provided to the Advisory
Committee.
(2) Within ten days of receipt by the
Department staff of an agency’s
comments or new evidence, if
applicable, or of receipt by the agency
of the Department staff’s comments,
Department staff, the agency, or both, as
applicable, may submit a response to
the senior Department official.
Simultaneously with submission, the
agency must provide a copy of any
response to the Department staff.
Simultaneously with submission,
Department staff must provide a copy of
any response to the agency.
(Authority: 20 U.S.C. 1099b)

Review and Decision by the Senior
Department Official
§ 602.36 Senior Department official’s
decision.

(a) The senior Department official
makes a decision regarding recognition
of an agency based on the record
compiled under §§ 602.32, 602.33,
602.34, and 602.35 including, as
applicable, the following:
(1) The materials provided to the
Advisory Committee under § 602.34(c).
(2) The transcript of the Advisory
Committee meeting.
(3) The recommendation of the
Advisory Committee.
(4) Written comments and responses
submitted under § 602.35.
(5) New evidence submitted in
accordance with § 602.35(c)(1).
(6) A communication from the
Secretary referring an issue to the senior
Department official’s consideration
under § 602.37(e).
(b) In the event that statutory
authority or appropriations for the
Advisory Committee ends, or there
are fewer duly appointed Advisory
Committee members than needed to
constitute a quorum, and under
extraordinary circumstances when there

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are serious concerns about an agency’s
compliance with subpart B of this part
that require prompt attention, the senior
Department official may make a
decision in a recognition proceeding
based on the record compiled under
§ 602.32 or § 602.33 after providing the
agency with an opportunity to respond
to the final staff analysis. Any decision
made by the senior Department official
absent a recommendation from the
Advisory Committee may be appealed to
the Secretary as provided in § 602.37.
(c) Following consideration of an
agency’s recognition under this section,
the senior Department official issues a
recognition decision.
(d) Except with respect to decisions
made under paragraph (f) or (g) of this
section and matters referred to the
senior Department official under
§ 602.37(e) or (f), the senior Department
official notifies the agency in writing of
the senior Department official’s decision
regarding the agency’s recognition
within 90 days of the Advisory
Committee meeting or conclusion of the
review under paragraph (b) of this
section.
(e) The senior Department official’s
decision may include, but is not limited
to, approving, denying, limiting,
suspending, or terminating recognition,
granting or denying an application for
an expansion of scope, revising or
affirming the scope of the agency, or
continuing recognition pending
submission and review of a compliance
report under §§ 602.32 and 602.34 and
review of the report by the senior
Department official under this section.
(1)(i) The senior Department official
approves recognition if the agency
complies with the criteria for
recognition listed in subpart B of this
part and if the agency effectively applies
those criteria.
(ii) If the senior Department official
approves recognition, the recognition
decision defines the scope of
recognition and the recognition period.
The recognition period does not exceed
five years, including any time during
which recognition was continued to
permit submission and review of a
compliance report.
(iii) If the scope or period of
recognition is less than that requested
by the agency, the senior Department
official explains the reasons for
approving a lesser scope or recognition
period.
(2)(i) Except as provided in paragraph
(e)(3) of this section, if the agency either
fails to comply with the criteria for
recognition listed in subpart B of this
part, or to apply those criteria
effectively, the senior Department

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official denies, limits, suspends, or
terminates recognition.
(ii) If the senior Department official
denies, limits, suspends, or terminates
recognition, the senior Department
official specifies the reasons for this
decision, including all criteria the
agency fails to meet and all criteria the
agency has failed to apply effectively.
(3)(i) Except as provided in paragraph
(e)(3)(ii) of this section, if a recognized
agency fails to demonstrate compliance
with or effective application of a
criterion or criteria, but the senior
Department official concludes that the
agency will demonstrate or achieve
compliance with the criteria for
recognition and effective application of
those criteria within 12 months or less,
the senior Department official may
continue the agency’s recognition,
pending submission by the agency of a
compliance report, review of the report
under §§ 602.32 and 602.34, and review
of the report by the senior Department
official under this section. In such a
case, the senior Department official
specifies the criteria the compliance
report must address, and a time period,
not longer than 12 months, during
which the agency must achieve
compliance and effectively apply the
criteria. The compliance report
documenting compliance and effective
application of criteria is due not later
than 30 days after the end of the period
specified in the senior Department
official’s decision.
(ii) If the record includes a
compliance report, and the senior
Department official determines that an
agency has not complied with the
criteria for recognition, or has not
effectively applied those criteria, during
the time period specified by the senior
Department official in accordance with
paragraph (e)(3)(i) of this section, the
senior Department official denies,
limits, suspends, or terminates
recognition, except, in extraordinary
circumstances, upon a showing of good
cause for an extension of time as
determined by the senior Department
official and detailed in the senior
Department official’s decision. If the
senior Department official determines
good cause for an extension has been
shown, the senior Department official
specifies the length of the extension and
what the agency must do during it to
merit a renewal of recognition.
(f) If the senior Department official
determines, based on the record, that a
decision to deny, limit, suspend, or
terminate an agency’s recognition may
be warranted based on a finding that the
agency is noncompliant with, or
ineffective in its application of, a
criterion or criteria of recognition not

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identified earlier in the proceedings as
an area of noncompliance, the senior
Department official provides—
(1) The agency with an opportunity to
submit a written response and
documentary evidence addressing the
finding; and
(2) The staff with an opportunity to
present its analysis in writing.
(g) If relevant and material
information pertaining to an agency’s
compliance with recognition criteria,
but not contained in the record, comes
to the senior Department official’s
attention while a decision regarding the
agency’s recognition is pending before
the senior Department official, and if the
senior Department official concludes the
recognition decision should not be
made without consideration of the
information, the senior Department
official either—
(1)(i) Does not make a decision
regarding recognition of the agency; and
(ii) Refers the matter to Department
staff for review and analysis under
§ 602.32 or § 602.33, as appropriate, and
consideration by the Advisory
Committee under § 602.34; or
(2)(i) Provides the information to the
agency and Department staff;
(ii) Permits the agency to respond to
the senior Department official and the
Department staff in writing, and to
include additional evidence relevant to
the issue, and specifies a deadline;
(iii) Provides Department staff with an
opportunity to respond in writing to the
agency’s submission under paragraph
(g)(2)(ii) of this section, specifying a
deadline; and
(iv) Issues a recognition decision
based on the record described in
paragraph (a) of this section, as
supplemented by the information
provided under this paragraph.
(h) No agency may submit
information to the senior Department
official, or ask others to submit
information on its behalf, for purposes
of invoking paragraph (g) of this section.
Before invoking paragraph (g) of this
section, the senior Department official
will take into account whether the
information, if submitted by a third
party, could have been submitted in
accordance with § 602.32(a) or
§ 602.33(e)(2).
(i) If the senior Department official
does not reach a final decision to
approve, deny, limit, suspend, or
terminate an agency’s recognition before
the expiration of its recognition period,
the senior Department official
automatically extends the recognition
period until a final decision is reached.
(j) Unless appealed in accordance
with § 602.37, the senior Department

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official’s decision is the final decision of
the Secretary.
(Authority: 20 U.S.C. 1099b)

Appeal Rights and Procedures
§ 602.37 Appealing the senior Department
official’s decision to the Secretary.

(a) The agency may appeal the senior
Department official’s decision to the
Secretary. Such appeal stays the
decision of the senior Department
official until final disposition of the
appeal. If an agency wishes to appeal,
the agency must—
(1) Notify the Secretary and the senior
Department official in writing of its
intent to appeal the decision of the
senior Department official, no later than
ten days after receipt of the decision;
(2) Submit its appeal to the Secretary
in writing no later than 30 days after
receipt of the decision; and
(3) Provide the senior Department
official with a copy of the appeal at the
same time it submits the appeal to the
Secretary.
(b) The senior Department official
may file a written response to the
appeal. To do so, the senior Department
official must—
(1) Submit a response to the Secretary
no later than 30 days after receipt of a
copy of the appeal; and
(2) Provide the agency with a copy of
the senior Department official’s
response at the same time it is
submitted to the Secretary.
(c) Neither the agency nor the senior
Department official may include in its
submission any new evidence it did not
submit previously in the proceeding.
(d) On appeal, the Secretary makes a
recognition decision, as described in
§ 602.36(e). If the decision requires a
compliance report, the report is due
within 30 days after the end of the
period specified in the Secretary’s
decision. The Secretary renders a final
decision after taking into account the
senior Department official’s decision,
the agency’s written submissions on
appeal, the senior Department official’s
response to the appeal, if any, and the
entire record before the senior
Department official. The Secretary
notifies the agency in writing of the
Secretary’s decision regarding the
agency’s recognition.
(e) The Secretary may determine,
based on the record, that a decision to
deny, limit, suspend, or terminate an
agency’s recognition may be warranted
based on a finding that the agency is
noncompliant with, or ineffective in its
application with respect to, a criterion
or criteria for recognition not identified
as an area of noncompliance earlier in
the proceedings. In that case, the

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Secretary, without further consideration
of the appeal, refers the matter to the
senior Department official for
consideration of the issue under
§ 602.36(f). After the senior Department
official makes a decision, the agency
may, if desired, appeal that decision to
the Secretary.
(f) If relevant and material
information pertaining to an agency’s
compliance with recognition criteria,
but not contained in the record, comes
to the Secretary’s attention while a
decision regarding the agency’s
recognition is pending before the
Secretary, and if the Secretary
concludes the recognition decision
should not be made without
consideration of the information, the
Secretary either—
(1)(i) Does not make a decision
regarding recognition of the agency; and
(ii) Refers the matter to Department
staff for review and analysis under
§ 602.32 or § 602.33, as appropriate, and
review by the Advisory Committee
under § 602.34; and consideration by
the senior Department official under
§ 602.36; or

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(2)(i) Provides the information to the
agency and the senior Department
official;
(ii) Permits the agency to respond to
the Secretary and the senior Department
official in writing, and to include
additional evidence relevant to the
issue, and specifies a deadline;
(iii) Provides the senior Department
official with an opportunity to respond
in writing to the agency’s submission
under paragraph (f)(2)(ii) of this section,
specifying a deadline; and
(iv) Issues a recognition decision
based on all the materials described in
paragraphs (d) and (f) of this section.
(g) No agency may submit information
to the Secretary, or ask others to submit
information on its behalf, for purposes
of invoking paragraph (f) of this section.
Before invoking paragraph (f) of this
section, the Secretary will take into
account whether the information, if
submitted by a third party, could have
been submitted in accordance with
§ 602.32(a) or § 602.33(e)(2).
(h) If the Secretary does not reach a
final decision on appeal to approve,
deny, limit, suspend, or terminate an

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agency’s recognition before the
expiration of its recognition period, the
Secretary automatically extends the
recognition period until a final decision
is reached.
(Authority: 20 U.S.C. 1099b)
§ 602.38 Contesting the Secretary’s final
decision to deny, limit, suspend, or
terminate an agency’s recognition.

An agency may contest the Secretary’s
decision under this part in the Federal
courts as a final decision in accordance
with applicable Federal law. Unless
otherwise directed by the court, a
decision of the Secretary to deny, limit,
suspend, or terminate the agency’s
recognition is not stayed during an
appeal in the Federal courts.
(Authority: 20 U.S.C. 1099b)

17. Subpart D is removed in its
entirety.
18. Subpart E is redesignated as
subpart D.
[FR Doc. E9–18368 Filed 8–5–09; 8:45 am]
BILLING CODE 4000–01–P

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