CODE OF FEDERAL REGULATIONS
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Title 34—
(This book contains part 400 to End)
20 U.S.C. 2301
(a) The purpose of the Vocational and Applied Technology Education Programs is to make the United States more competitive in the world economy by developing more fully the academic and occupational skills of all segments of the population.
(b) The purpose will be achieved principally through concentrating resources on improving educational programs leading to academic and occupational skill competencies needed to work in a technologically advanced society.
The regulations in this part apply to the Vocational and Applied Technology Education Programs as follows:
(a)
(2) State-Administered Tech-Prep Education Program (34 CFR part 406).
(3) Supplementary State Grants Program (34 CFR part 407).
(b)
(2) Native Hawaiian Vocational Education Program (34 CFR part 402).
(3) National Tech-Prep Education Program (34 CFR part 405).
(4) Community Education Employment Centers Program (34 CFR part 408).
(5) Vocational Education Lighthouse Schools Program (34 CFR part 409).
(6) Tribally Controlled Postsecondary Vocational Institutions Program (34 CFR part 410).
(7) Vocational Education Research Program (34 CFR part 411).
(8) National Network for Curriculum Coordination in Vocational and Technical Education (34 CFR part 412).
(9) National Center or Centers for Research in Vocational Education (34 CFR part 413).
(10) Materials Development in Telecommunications Program (34 CFR part 414).
(11) Demonstration Centers for the Training of Dislocated Workers Program (34 CFR part 415).
(12) Vocational Education Training and Study Grants Program (34 CFR part 416).
(13) Vocational Education Leadership Development Awards Program (34 CFR part 417).
(14) Vocational Educator Training Fellowships Program (34 CFR part 418).
(15) Internships for Gifted and Talented Vocational Education Students Program (34 CFR part 419).
(16) Business and Education Standards Program (34 CFR part 421).
(17) Educational Programs for Federal Correctional Institutions (34 CFR part 422).
(18) Vocational Education Dropout Prevention Program (34 CFR part 423).
(19) Model Centers of Regional Training for Skilled Trades Program (34 CFR part 424).
(20) Demonstration Projects for the Integration of Vocational and Academic Learning Program (34 CFR part 425).
(21) Cooperative Demonstration Programs (34 CFR part 426).
(22) Bilingual Vocational Training Program (34 CFR part 427).
(23) Bilingual Vocational Instructor Training Program (34 CFR part 428).
(24) Bilingual Materials, Methods, and Techniques Program (34 CFR part 429).
The following regulations apply to the Vocational and Applied Technology Education Programs:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs) (applicable to parts 401, 402, 405, 408, 409, 410, 411, 412, 413, 414, 415, 416, 417, 418, 419, 421, 422, 423, 424, 425, 426, 427, 428, and 429 except that 34 CFR 75.720(b) does not apply to performance reports under parts 401, 402, 405, 408, 409, 412, 413, 415, 416, 417, 419, 422, 423, 424, 425, 426, 427, and 428, and to financial reports under parts 412 and 413).
(3) 34 CFR part 76 (State-Administered Programs) (applicable to parts 403, 406, and 407).
(4) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(5) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities) (not applicable to parts 401, 410, 411, 413, 418, and 419).
(6) 34 CFR part 80 (Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments).
(7) 34 CFR part 81 (General Education Provisions Act— Enforcement).
(8) 34 CFR part 82 (New Restrictions on Lobbying) (not applicable to parts 401 and 410).
(9) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(10) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The Federal Acquisition Regulation (FAR) in 48 CFR chapter 1 and the Education Department Acquisition Regulation (EDAR) in 48 CFR chapter 34 (applicable to contracts under parts 401, 402, 411, 412, 426, 427, 428, and 429).
(c) The regulations in this part 400.
(d) The regulations in 34 CFR parts 401, 402, 403, 405, 406, 407, 408, 409, 410, 411, 412, 413, 414, 415, 416, 417, 418, 419, 421, 422, 423, 424, 425, 426, 427, 428, and 429.
(a)
(b)
(1) A specialized high school used exclusively or principally for the provision of vocational education to individuals who are available for study in preparation for entering the labor market;
(2) The department of a high school exclusively or principally used for providing vocational education in not less than five different occupational fields to individuals who are available for study in preparation for entering the labor market;
(3) A technical institute or vocational school used exclusively or principally for the provision of vocational education to individuals who have completed or left high school and who are available for study in preparation for entering the labor market; or
(4) The department or division of a junior college, community college, or university that operates under the policies of the State board and provides vocational education in not less than five different occupational fields leading to immediate employment but not necessarily leading to a baccalaureate degree, if, in the case of a school, department, or division described in paragraph (3) of this definition or in this paragraph, it admits as regular students both individuals who have completed high school and individuals who have left high school.
(1) Pertain to the body of subject matter and related techniques and methods organized for the development in individuals of career awareness, career planning, career decision-making, placement skills, and knowledge and understanding of local, State, and national occupational, educational, and labor market needs, trends, and opportunities; and
(2) Assist those individuals in making and implementing informed educational and occupational choices.
(1) Prison;
(2) Jail;
(3) Reformatory;
(4) Work farm;
(5) Detention center; or
(6) Halfway house, community-based rehabilitation center, or any other similar institution designed for the confinement or rehabilitation of criminal offenders.
(1) Is an adult;
(2) Has worked as an adult primarily without remuneration to care for the home and family, and for that reason has diminished marketable skills; and
(3)(i) Has been dependent on public assistance or on the income of a relative but is no longer supported by that income;
(ii) Is a parent whose youngest dependent child will become ineligible to receive assistance under part A of title IV of the Social Security Act (42 U.S.C. 601), Aid to Families with Dependent Children, within two years of the parent's application for assistance under the Carl D. Perkins Vocational and Applied Technology Education Act;
(iii) Is unemployed or underemployed and is experiencing difficulty in obtaining any employment or suitable employment, as appropriate; or
(iv) Is described in paragraphs (1) and (2) of this definition and is a criminal offender.
(1) Eligible for any of the following:
(i) The program for Aid to Families with Dependent Children under part A of title IV of the Social Security Act (42 U.S.C. 601).
(ii) Benefits under the Food Stamp Act of 1977 (7 U.S.C. 2011).
(iii) To be counted for purposes of section 1005 of chapter 1 of title I of the Elementary and Secondary Education Act of 1965, as amended (chapter 1) (20 U.S.C. 2701).
(iv) The free or reduced-price meals program under the National School Lunch Act (42 U.S.C. 1751).
The National School Lunch Act prohibits the identification of students by name. However, State and local projects may use the total number of students participating in a free or reduced-priced meals program to determine eligibility for projects, services, and activities under the Vocational and Applied Technology Education Programs.
(v) Participation in programs assisted under title II of the JTPA.
(2) In receipt of a Pell grant or assistance under a comparable State program of need-based financial assistance.
(3) Determined by the Secretary to be low-income according to the latest available data from the Department of Commerce or the Department of Health and Human Services Poverty Guidelines.
(4) Identified as low income according to other indices of economic status, including estimates of those indices, if a grantee demonstrates to the satisfaction of the Secretary that those indices are more representative of the number of economically disadvantaged students attending vocational education programs. The Secretary determines, on a case-by-case basis, whether other indices of economic status are more representative of the number of economically disadvantaged students attending vocational education programs, taking into consideration, for example, the statistical reliability of any data submitted by a grantee as well as the general acceptance of the indices by other agencies in the State or local area.
(1) Has a physical or mental impairment that substantially limits one or more of the major life activities of that individual;
(2) Has a record of an impairment described in paragraph (1) of this definition; or
(3) Is regarded as having an impairment described in paragraph (1) of this definition.
This definition necessarily includes any individual who has been evaluated under part B of the IDEA and determined to be an individual with a disability who is in need of special education and related services; and any individual who is considered disabled under section 504 of the Rehabilitation Act of 1973.
(i) Admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate;
(ii) Is legally authorized within such State to provide a program of education beyond secondary education;
(iii) Provides an educational program for which it awards a bachelor's degree or provides not less than a two-year program that is acceptable for full credit toward such a degree;
(iv) Is a public or other nonprofit institution; and
(v) Is accredited by a nationally recognized accrediting agency or association, or if not so accredited—
(A) Is an institution with respect to which the Secretary has determined that there is satisfactory assurance, considering the resources available to the institution, the period of time, if any, during which it has operated, the effort it is making to meet accreditation standards, and the purpose for which this determination is being made, that the institution will meet the accreditation standards of such an agency or association within a reasonable time; or
(B) Is an institution whose credits are accepted, on transfer, by not less than three institutions which are so accredited, for credit on the same basis as if transferred from an institution so accredited.
(2) The term also includes—
(i) Any school which provides not less than a one-year program of training to prepare students for gainful employment in a recognized occupation and that meets the provisions of paragraphs (1) (i), (ii), (iv), and (v) of this definition; and
(ii) A public or nonprofit private educational institution in any State which, in lieu of the requirement in paragraph (1) of this definition, admits as regular students persons who are beyond the age of compulsory school attendance in the State in which the institution is located and who meet the requirements of section 484(d) of the Higher Education Act of 1965 (20 U.S.C. 1091(d)).
(1)(i) Who were not born in the United States or whose native language is a language other than English;
(ii) Who come from environments where a language other than English is dominant; or
(iii) Who are American Indian and Alaska Natives and who come from environments where a language other than English has had a significant impact on their level of English language proficiency; and
(2) Who by reason thereof, have sufficient difficulty speaking, reading, writing, or understanding the English language to deny those individuals the opportunity to learn successfully in classrooms where the language of instruction is English or to participate fully in our society.
(1) Services, programs, or activities related to outreach to, or recruitment of, potential vocational education students;
(2) Career counseling and personal counseling;
(3) Vocational assessment and testing; and
(4) Other appropriate services, programs, or activities.
(1) Admits as regular students only persons who have completed or left elementary or secondary school and who have the ability to benefit from the training offered by the institution;
(2) Is legally authorized to provide, and provides within that State, a program of postsecondary vocational or technical education designed to fit individuals for useful employment in recognized occupations;
(3) Has been in existence for two years or has been specially accredited by the Secretary as an institution meeting the other requirements of this definition; and
(4) Is accredited—
(i) By a nationally recognized accrediting agency or association listed by the Secretary;
(ii) If the Secretary determines that there is no nationally recognized accrediting agency or association qualified to accredit schools of a particular category, by a State agency listed by the Secretary; or
(iii) If the Secretary determines that there is no nationally recognized or State agency or association qualified to accredit schools of a particular category, by an advisory committee appointed by the Secretary and composed of persons specially qualified to evaluate training provided by schools of that category. The committee shall prescribe the standards of content, scope, and quality that must be met by those schools and shall also determine whether particular schools meet those standards.
(1) Is unmarried or legally separated from a spouse; and
(2)(i) Has a minor child or children for which the parent has either custody or joint custody; or
(ii) Is pregnant.
(1) Project activities and results are demonstrated to others;
(2) Technical assistance is provided to others to help them replicate project activities and results;
(3) Project activities and results are replicated at other sites; or
(4) Information and material about or resulting from the project are disseminated.
(a) Funds made available under the Act may be used to provide additional funds under any of the programs in—
(1) Title II, section 123 and title III of the JTPA; or
(2) The Wagner-Peyser Act.
(b) Funds used to carry out paragraph (a) of this section may be used only if the—
(1) Program otherwise meets the requirements of the Act and the requirements of the programs in paragraph (a) (1) and (2) of this section;
(2) Program serves the same individuals that are served under the Act;
(3) Program provides services in a coordinated manner with services provided under the Act; and
(4) Funds would be used to supplement, and not supplant, funds provided from non-Federal sources.
(c) Funds that meet the conditions in paragraphs (a) and (b) of this section may be used as matching funds.
(a)
(1) Local school officials representing eligible recipients;
(2) Representatives of—
(i) Organized labor;
(ii) Business;
(iii) Superintendents;
(iv) Community-based organizations;
(v) Private industry councils established under section 102(a) of the JTPA (29 U.S.C. 1512);
(vi) State councils;
(vii) Parents;
(viii) Special populations; and
(ix) Correctional institutions;
(3) The administrator appointed under 34 CFR 403.13(a);
(4) The State administrator of programs assisted under part B of the IDEA;
(5) The State administrator of programs assisted under chapter 1;
(6) The State administrator of programs for students of limited English proficiency; and
(7) Guidance counselors.
(b)
(1) State organizations representing school administrators;
(2) Teachers;
(3) Parents;
(4) Members of local boards of education; and
(5) Appropriate representatives of institutions of higher education.
(c)(1)
(i) Representatives of local educational agencies, who must constitute a majority of the members of the committee;
(ii) School administrators;
(iii) Teachers;
(iv) Parents;
(v) Members of local boards of education;
(vi) Representatives of institutions of higher education; and
(vii) Students.
(2) School administrators, teachers, and members of local boards of education may be counted as representatives of LEAs for purposes of paragraph (c)(1)(i) of this section.
(a)(1)
(2) The Committee shall make recommendations to the State board with respect to modifying statewide standards and measures based on information provided by the State under 34 CFR 403.201(d).
(b)(1)
(2) In an emergency, in which a rule or regulation must be issued within a very limited time period to assist eligible recipients with the operation of projects, services, or activities, the State—
(i) May issue a proposed rule or regulation without meeting the requirements in paragraph (b)(1) of this section; but
(ii) Shall immediately convene the Committee to review the rule or regulation before it is issued in final form.
See § 400.9(c).
(3) If a State policy is binding on eligible recipients and has the same effect as a formal rule or regulation, although it is not issued as one, that policy is covered by this section.
(a) The portion of any student financial assistance received under the Act that is made available for attendance costs described in paragraph (b) of this section may not be considered as income or resources in determining eligibility for assistance under any other program funded in whole or in part with Federal funds.
(b) For purposes of this section, attendance costs are —
(1) Tuition and fees normally assessed a student carrying the same academic workload as determined by the institution, including costs for rental or purchases of any equipment, materials, or supplies required of all students in the same course of study; and
(2) An allowance for books, supplies, transportation, dependent care, and miscellaneous personal expenses for a student attending an institution on at least a half-time basis, as determined by the institution.
In addition to the Act, applicable Federal laws, and regulations, the following requirements apply to Vocational and Applied Technology Education Programs:
(a) A State that receives funds under the Act shall cooperate with the Secretary in supplying the information the Secretary requires, in the form the Secretary requires, and shall comply in its reports with the information system developed by the Secretary under section 421 of the Act.
(b) Nothing in the Act is to be construed to be inconsistent with applicable Federal laws guaranteeing civil rights, or is intended to, or has the effect of, limiting or diminishing any obligations imposed under the IDEA or section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794).
(c) Any State rule, regulation, or policy imposed on the administration or operation of programs funded under the Act, including any rule, regulation, or policy based on a State's interpretation of any Federal law, regulation, or guideline, must be identified as a State imposed requirement.
(d) Funds provided under the Act may not be used for the purpose of directly providing incentives or inducements to relocate a business or enterprise from one State to another State if the relocation would result in a reduction in the number of jobs available
(e) A State may not take into consideration payments under the Act in determining for any educational agency or institution in that State the eligibility for State aid or the amount of State aid with respect to public education within the State.
(a) Recipients of grants and cooperative agreements shall report information about students, projects, evaluations, dissemination, expenditures, accomplishments, and any other information, as may be required by the Secretary.
(b) Recipients of grants and cooperative agreements under—
(1) Parts 401, 402, 405, 408, 409, 413, 415, 416, 417, 419, 422, 423, 424, 425, 426, 427, and 428 shall submit performance reports at least semi-annually;
(2) Part 412 shall submit monthly progress and financial status reports and an annual impact report; and
(3) Part 413 shall submit monthly exception reports and quarterly financial status reports.
(c) Recipients of grants under parts 403, 406, and 407 shall submit annual performance and financial reports.
20 U.S.C. 2313(b), unless otherwise noted.
The Indian Vocational Education Program provides financial assistance to projects that provide vocational education for the benefit of Indians.
(a) The following entities are eligible for an award under this program:
(1) A tribal organization of any Indian tribe that is eligible to contract with the Secretary of the Interior under the Indian Self-Determination and Education Assistance Act or under the Act of April 16, 1934.
(2) A Bureau-funded school offering a secondary program.
(b) Any tribal organization or Bureau-funded school described in paragraph (a) of this section may apply individually or jointly as part of a consortium with one or more eligible tribal organizations or schools.
(c)(1) A consortium shall enter into an agreement signed by all members of the consortium, and designating one member of the consortium as the applicant and grantee.
(2) The agreement must detail the activities each member of the consortium plans to perform, and must bind each member to every statement and assurance made in the application.
(3) The applicant shall submit the agreement with its application.
See 34 CFR 75.127-75.129—Group applications.
(a) The Secretary provides financial assistance through grants, contracts, or cooperative agreements to plan, conduct, and administer projects or portions of projects that are authorized by and consistent with the purposes of the Act. In the case of a grant to a Bureau-funded school, the Secretary provides a minimum grant of $35,000.
(b) Projects funded under this program are in addition to other programs, services, and activities made available under other provisions of the Act to—
(1) Eligible Indians in need of vocational education; and
(2) Eligible Indian tribes as community-based organizations that receive State vocational education assistance.
(c) An award under this program may be used to provide a stipend to a student who—
(1) Is enrolled in a vocational education project funded under this program; and
(2) Has an acute economic need that cannot be met through work-study programs.
(d) The amount of a stipend may be the greater of either the minimum hourly wage prescribed by State or local law, or the minimum hourly wage set under the Fair Labor Standards Act. A stipend may not be paid for time a student is not in attendance in a project.
The following regulations apply to the Indian Vocational Education Program:
(a) The regulations in 34 CFR part 400 (except that 34 CFR parts 79 and 82 do not apply to this program).
(b) The regulations in this part 401.
(a) The definitions in 34 CFR 400.4 apply to this part.
(b) The following definitions also apply to this part:
(1) A Bureau-operated elementary or secondary day or boarding school or a Bureau-operated dormitory for students attending a school other than a Bureau school;
(2) An elementary or secondary school or a dormitory that receives financial assistance for its operation under a contract or agreement with the Bureau under sections 102, 104(1), or 208 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450f, 450h(1), and 458d); or
(3) A school for which assistance is provided under the Tribally Controlled Schools Act of 1988.
(a) An application from a tribal organization, other than a Bureau-funded school, must be submitted to the Secretary by the Indian tribe.
(b) An application for a project to serve more than one Indian tribe must be approved by each tribe to be served.
(c) An application from a Bureau-funded school may be submitted directly to the Secretary.
(a) The Secretary evaluates an application on the basis of the criteria in § 401.21.
(b) The Secretary may award up to 100 points, including a reserved 15 points to be distributed in accordance with paragraph (d) of this section, based on the criteria in § 401.21.
(c) Subject to paragraph (d) of this section, the maximum possible score for each criterion is indicated in parentheses after the heading for each criterion.
(d) For each competition, as announced through a notice published in the
(e) In addition to the 100 points to be awarded based on the criteria in § 401.21, the Secretary awards—
(1) Up to 5 points to applications that propose exemplary approaches that involve, coordinate with, or encourage tribal economic development plans; and
(2) Five points to applications from tribally controlled community colleges that—
(i) Are accredited or are candidates for accreditation by a nationally recognized accreditation organization as an institution of postsecondary vocational education; or
(ii) Operate vocational education programs that are accredited or are candidates for accreditation by a nationally recognized accreditation organization and issue certificates for completion of vocational education programs.
The Secretary uses the following criteria to evaluate an application:
(a)
(1) Proposes measurable goals for student enrollment, completion, and placement (including placement in jobs or military specialties and in continuing education or training opportunities) that are realistic in terms of stated needs, resources, and job opportunities in each occupation for which training is to be provided;
(2) Proposes goals that take into consideration any related goals or standards developed for Job Opportunities and Basic Skills (JOBS) programs (42 U.S.C. 681
(3) Describes, for each occupation for which training is to be provided, how successful program completion will be determined in terms of academic and vocational competencies demonstrated by enrollees prior to completion and any academic or work credentials acquired by enrollees upon completion;
(4) Demonstrates the active commitment in the project's planning and operation by advisory committees, tribal planning offices, the JOBS program office, the JTPA program director, and potential employers such as tribal enterprises, private enterprises (on or off reservation), and other organizations;
(5) Is targeted to individuals with inadequate skills to assist those individuals in obtaining new employment; and
(6) Includes a thorough description of the approach to be used including some or all of the following components:
(i) Methods of participant selection.
(ii) Assessment and feedback of participant progress.
(iii) Coordination of vocational instruction, academic instruction, and support services such as counseling, transportation, and child care.
(iv) Curriculum and, if appropriate, approaches for providing on-the-job training experience.
(b)
(1) The job market and related needs (such as educational level) of the target population;
(2) Characteristics of that population, including an estimate of those to be served by the project;
(3) How the project will meet the needs of the target population; and
(4) A description of any ongoing and planned activities relative to those needs, including, if appropriate, how the State plan developed under 34 CFR 403.30 through 403.34 is designed to meet those needs.
(c)
(1) The establishment of objectives that are clearly related to project goals and activities and are measurable with respect to anticipated enrollments, completions, and placements;
(2) A management plan that describes the chain of command, how staff will be managed, how coordination among staff will be accomplished, and timelines for each activity; and
(3) The way the applicant intends to use its resources and personnel to achieve each objective.
(d)
(i) The qualifications of the project director;
(ii) The qualifications of each of the other key personnel to be used on the project;
(iii) The time, including justification for the time that each one of the key personnel, including the project director, will commit to the project; and
(iv) Subject to the Indian preference provisions of the Indian Self-Determination Act (25 U.S.C. 450
(2) To determine personnel qualifications, the Secretary considers—
(i) The experience and training of key personnel in project management and in fields particularly related to the objectives of the project; and
(ii) Any other qualifications of key personnel that pertain to the quality of the project.
(e)
(1) The budget is adequate to support the project activities;
(2) Costs are reasonable in relation to the objectives of the project and the number of participants to be served; and
(3) The budget narrative justifies the expenditures.
(f)
(1) The plan identifies, at a minimum, types of data to be collected and reported with respect to the academic and vocational competencies demonstrated by participants and the number and kind of academic and work credentials acquired by participants who complete the training;
(2) The plan identifies, at a minimum, types of data to be collected and reported with respect to the achievement of project goals for the enrollment, completion, and placement of participants. The data must be broken down by sex and by occupation for which the training was provided;
(3) The methods of evaluation are appropriate for the project and, to the extent possible, are objective and produce data that are quantifiable; and
(4) The methods of evaluation provide periodic data that can be used by the project for ongoing program improvement.
(g)
(1) The expected employment opportunities (including any military specialties) and any additional educational or training opportunities that are related to the participants’ training;
(2) Information and documentation concerning potential employers’ commitment to hire participants who complete the training; and
(3) An estimate of the percentage of trainees expected to be employed (including self-employed individuals) in the field for which they were trained following completion of the training.
The Secretary may decide not to award a grant or cooperative agreement if—
(a) The proposed project duplicates an effort already being made; or
(b) Funding the project would create an inequitable distribution of funds under this part among Indian tribes.
(a) After receiving written notice from an authorized official of the Department that the Secretary will not award a grant or cooperative agreement to an eligible applicant under § 401.2(a)(1), an Indian tribal organization has 30 calendar days to make a written request to the Secretary for a hearing to review the Secretary's decision.
(b) Within 10 business days of the Department's receipt of a hearing request, the Secretary designates a Department employee who is not assigned to the Office of Vocational and Adult Education to serve as a hearing officer. The hearing officer conducts a hearing and issues a written decision within 75 calendar days of the Department's receipt of the hearing request. The hearing officer establishes rules for the conduct of the hearing. The hearing officer conducts the hearing solely on the basis of written submissions unless the officer determines, in accordance with standards in 34 CFR 81.6(b), that oral argument or testimony is necessary.
(c) The Secretary does not make any award under this part to an Indian tribal organization until the hearing officer issues a written decision on any appeal brought under this section.
(a) Grants, cooperative agreements, or contracts with tribal organizations are subject to the terms and conditions of section 102 of the Indian Self-Determination Act (25 U.S.C. 450f). These awards must be conducted by the recipient or contractor in accordance with the provisions of sections 4, 5, and 6 of the Act of April 16, 1934, that are relevant to the projects administered under this part. Section 4 contains requirements pertaining to submission of an education plan by a contractor. Section 5 pertains to participation of parents of Indian children. Section 6 pertains to reimbursement for educating non-resident students.
(b) Grants to Bureau-funded schools are not subject to the requirements of the Indian Self-Determination Act or the Act of April 16, 1934.
(a) Each grantee shall annually provide and budget for either an internal or external evaluation, or both, of its activities.
(b) The evaluation must be both formative and summative in nature.
(c) The annual evaluation must include—
(1) Descriptions and analyses of the accuracy of records and the validity of measures used by the project to establish and report on the academic and vocational competencies demonstrated and the academic and work credentials acquired;
(2) Descriptions and analyses of the accuracy of records and the validity of measures used by the project to establish and report on participant enrollment, completion, and placement by sex and socio-economic status for each occupation for which training has been provided;
(3) The grantee's progress in achieving the objectives in its approved application, including any approved revisions of the application;
(4) If applicable, actions taken by the grantee to address significant barriers impeding progress; and
(5) The effectiveness of the project in promoting key elements for participants’ job readiness, including—
(i) Coordination of services;
(ii) Improved attendance rates; and
(iii) Improved basic and vocational skills competencies.
20 U.S.C. 2313(c), unless otherwise noted.
The Native Hawaiian Vocational Education Program provides financial assistance to projects that provide vocational training and related activities for the benefit of native Hawaiians.
Any organization that primarily serves and represents native Hawaiians and that is recognized by the Governor of the State of Hawaii is eligible to apply for an award under this program.
The Secretary provides assistance through grants, contracts, or cooperative agreements to plan, conduct, and administer programs, or portions of programs, that provide vocational training and related activities for the benefit of native Hawaiians.
The following regulations apply to the Native Hawaiian Vocational Education Program:
(a) The regulations in 34 CFR part 400.
(b) The regulations in this part 402.
The following definitions apply to the Native Hawaiian Vocational Education Program:
(a) The definitions in 34 CFR 400.4 apply to this part.
(b) The following definition also applies to this part:
(a) The Secretary evaluates an application for a grant or cooperative agreement on the basis of the criteria in § 402.21.
(b) The Secretary may award up to 100 points, including a reserved 15 points to be distributed in accordance with paragraph (d) of this section, based on the criteria in § 402.21.
(c) Subject to paragraph (d) of this section, the maximum possible points for each criterion is indicated in parentheses after the heading for each criterion.
(d) For each competition, as announced in a notice published in the
The Secretary uses the following selection criteria to evaluate an application:
(a)
(1) The application presents a complete program design, including identifying the services to be provided, who will provide them, how they will be provided, and the expected outcomes for each activity;
(2) The proposed program is designed to meet the identified vocational education needs of native Hawaiians;
(3) The application proposes an effective plan for coordination with the office of the Hawaii State director for vocational education; and
(4) If vocational training is proposed within the project—
(i) Proposes measurable goals for student enrollment, completion, and placement.
(ii) Proposes goals that take into consideration any related standards and measures developed for Job Opportunities and Basic Skills (JOBS) programs (42 U.S.C. 681
(iii) Proposes goals that take into consideration any standards set by the State board for vocational education for the occupation and geographic area; and
(iv) Describes how successful program completion will be determined for each occupation for which training is to be provided, in terms of the academic and vocational competencies demonstrated by enrollees prior to successful completion and any academic or work credentials acquired upon completion.
(b)
(1) The chain of command, how staff will be managed, how coordination among staff will be accomplished, and timelines for each activity;
(2) A clear description of the interrelationship among goals, objectives, and activities;
(3) The way the applicant plans to use the resources and personnel from the grant to achieve each objective; and
(4) How any contracts awarded by the grantee will be awarded, monitored, and evaluated.
(c)
(1) The Secretary reviews each application to determine the quality of key personnel the applicant plans to use on the project, including—
(i) The qualifications of the project director;
(ii) The qualifications of each of the other key personnel to be used on the project;
(iii) The time, including justification for the time, that each one of the key personnel, including the project director, will commit to the proposed project; and
(iv) How the applicant, as part of its nondiscriminatory employment practices, will ensure that personnel for this project are selected for employment without regard to race, color, national origin, gender, age, or disabling condition.
(2) To determine personnel qualifications, the Secretary considers—
(i) The experience and training of key personnel in project management and in fields particularly related to the objectives of the project; and
(ii) Any other qualifications of key personnel that pertain to the quality of the project.
(d)
(1) The Secretary reviews each application to determine the quality of the project's plan for an independent evaluation of the project, including, if applicable, the extent to which the plan includes activities during the formative stages of the project to help guide and improve the project, as well as a final evaluation that includes summary data and recommendations.
(2) The Secretary reviews each application to determine whether, for any training programs proposed—
(i) The plan identifies, at a minimum, types of data to be collected and reported with respect to the academic and vocational competencies demonstrated by participants and the number and kinds of academic and work credentials acquired by completers; and
(ii) The plan identifies, at a minimum, types of data to be collected and reported with respect to enrollment, completion, and placement of participants by sex and socio-economic status for each occupation for which training is provided.
(e)
(1) The budget is detailed and tied to the proposed activities;
(2) The budget narrative is explanatory and justifies expenses;
(3) The budget is adequate to support the project; and
(4) Costs are reasonable in relation to the objectives of the project.
(a) Each grantee shall annually provide and budget for an external evaluation of its activities.
(b) The evaluation must be both formative and summative in nature.
(c) The annual evaluation must include—
(1) The grantee's progress in achieving the objectives in its approved application, including any approved revisions of the application; and
(2) If applicable, actions taken by the grantee to address significant barriers impeding progress when training is provided by the project, including—
(i) Descriptions and analyses of the accuracy of records and the validity of measures used by the project to establish and report on the academic and vocational competencies demonstrated and the academic and work credentials acquired; and
(ii) Descriptions and analyses of the accuracy of records and the validity of measures used by the project to establish and report on participant enrollment, completion, and placement by sex and socio-economic status for each occupation for which training has been provided.
20 U.S.C. 2301
(a) Under the State Vocational and Applied Technology Education Program, the Secretary makes grants to States, to assist them, local educational agencies, postsecondary educational institutions, and other agencies and institutions to administer and conduct vocational education programs that are authorized by the Act.
(b) The State Vocational and Applied Technology Education Program consists of the programs under the basic programs for vocational education authorized by title II of the Act and listed in § 403.60, and the special programs authorized by title III of the Act that are covered by the State plan and listed in § 403.130.
Except as otherwise provided in § 403.131, a State is eligible for an award under the State Vocational and Applied Technology Education Program.
The following regulations apply to the State Vocational and Applied Technology Education Program:
(a) The regulations in 34 CFR part 400.
(b) The regulations in this part 403.
The definitions in 34 CFR 400.4 apply to the State Vocational and Applied Technology Education Program.
A State that desires to participate in the programs authorized by the Act shall, consistent with State law, designate or establish a State board of vocational education (State board). The State board must be the sole State agency responsible for the administration or the supervision of the State's vocational and applied technology education program.
The principal responsibilities of the State board must include—
(a) The coordination of the development, submission, and implementation of the State plan;
(b) The evaluation of the programs, services, and activities assisted under the Act, as required by §§ 403.32 (a)(7) and (b)(9) and 403.201 through 403.204;
(c) The development, in consultation with the State council on vocational education, of the State plan and its submission to the Secretary, as required by §§ 403.30 through 403.34;
(d) Consultation with the State council on vocational education and other appropriate agencies, groups, and individuals, including business, industry, and labor, involved in the planning, administration, evaluation, and coordination of programs funded under the Act;
(e) Convening and meeting as a State board, consistent with applicable State law and procedure, when the State board determines it is necessary to meet to carry out its functions under the Act, but not less than four times annually; and
(f) The adoption of those procedures the State board considers necessary to implement State level coordination with the State job training coordinating council in order to encourage cooperation between programs under the Act and programs under the Job Training Partnership Act (JTPA) (29 U.S.C. 1501
(a) The State board shall make available to each private industry council established within the State under section 102 of the JTPA a current listing of all programs assisted under the Act.
(b)(1) The State board, in consultation with the State council on vocational education established under § 403.17, shall establish a limited number of (but at least two) technical committees to advise the State council and the State board on the development of model curricula to address State labor market needs. The technical committees shall develop an inventory of skills that may be used by the State board to define state-of-the-art model curricula. This inventory must identify the type and level of knowledge and skills needed for entry, retention, and advancement in occupational areas taught in the State.
(2) The State board shall establish procedures that are consistent with the purposes of the Act for membership, operation, and duration of the technical committees. Their membership must be composed of representatives of—
(i) Employers from any relevant industry or occupation for which the committee is established;
(ii) Trade or professional organizations representing any relevant occupations; and
(iii) Organized labor, if appropriate.
(c) Except for the functions described in § 403.11, the State board may delegate any of its other administrative,
(d) The State board shall carry out the responsibilities described in §§ 403.13 through 403.18 and 403.200 through 403.208.
(a) A State that desires to participate in the State Vocational and Applied Technology Education Program shall assign one individual, within the appropriate agency established or designated by the State board under § 403.12(c), to administer vocational education programs within the State, to work full-time to assist the State board to fulfill the purposes of the Act by—
(1) Administering the program of vocational education for single parents, displaced homemakers, and single pregnant women described in § 403.81, and the sex equity program described in § 403.91;
(2) Gathering, analyzing, and disseminating data on the—
(i) Adequacy and effectiveness of vocational education programs in the State in meeting the education and employment needs of women, including the preparation of women for employment in technical occupations, new and emerging occupational fields, and occupations regarded as nontraditional for women; and
(ii) Status of men and women students and employees in the programs described in paragraph (a)(2)(i) of this section;
(3) Reviewing and commenting upon, and making recommendations concerning, the plans of local educational agencies, area vocational education schools, intermediate educational agencies, and postsecondary educational institutions to ensure that the needs of women and men for training in nontraditional jobs are met;
(4)(i) Reviewing vocational educational programs, including career guidance and counseling, for sex stereotyping and sex bias, with particular attention to practices that tend to inhibit the entry of women in high technology occupations; and
(ii) Submitting recommendations, to the State board for inclusion in the State plan, for programs and policies to overcome sex bias and sex stereotyping in the programs described in paragraph (a)(4)(i) of this section;
(5) Submitting to the State board an assessment of the State's progress in meeting the purposes of the Act with regard to overcoming sex discrimination and sex stereotyping;
(6) Reviewing proposed actions on grants, contracts, and the policies of the State board to ensure that the needs of women are addressed in the administration of the Act;
(7) Developing recommendations for programs of information and outreach to women concerning vocational education and employment opportunities for women, including opportunities for careers as technicians and skilled workers in technical fields and new and emerging occupational fields;
(8) Providing technical assistance and advice to local educational agencies, postsecondary institutions, and other interested parties in the State on expanding vocational opportunities for women;
(9) Assisting administrators, instructors, and counselors in implementing programs and activities to increase access for women, including displaced homemakers and single heads of households, to vocational education and to increase male and female students’ enrollment in nontraditional programs;
(10) Developing an annual plan for the use of all funds available for programs described in §§ 403.81 and 403.91;
(11) Managing the distribution of funds pursuant to §§ 403.81 and 403.91;
(12) Monitoring the use of funds distributed to recipients under §§ 403.81 and 403.91;
(13) Evaluating the effectiveness of programs and activities supported by funds under §§ 403.81 and 403.91;
(14) On a competitive basis, allocating and distributing to eligible recipients or community-based organizations subgrants or contracts to carry out the Programs for Single Parents, Displaced Homemakers, and Single
(15) Ensuring that each subgrant or contract awarded under the Programs for Single Parents, Displaced Homemakers, and Single Pregnant Women and the Sex Equity Program is of sufficient size, scope, and quality to be effective;
(16) Developing procedures for the collection from eligible recipients or community-based organizations that receive funds under §§ 403.81 and 403.91 of data appropriate to the individuals served in programs under §§ 403.81 and 403.91 in order to permit an evaluation of effectiveness of those programs as required by paragraph (a)(13) of this section; and
(17) Cooperating in the elimination of sex bias and sex stereotyping in Consumer and Homemaking Education Programs.
(b) A State shall, in accordance with § 403.180(b)(4)(i), reserve at least $60,000 to carry out the provisions of paragraph (a) of this section, including the provision of necessary and reasonable staff support.
(c) For the purposes of this section, the term “State” includes only the fifty States and the District of Columbia.
(a) A State desiring to participate in programs authorized by the Act shall designate or assign the head of the State office responsible for administering part B of the Individuals with Disabilities Education Act (IDEA) (20 U.S.C. 1400
(1) Individuals with disabilities are receiving vocational educational services;
(2) Applications of the eligible recipients provide assurances of compliance with the requirements of section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and the IDEA and regulations implementing those statutes, regarding equal access to programs; and
(3) Eligible recipients have—
(i) Identified the number of students with disabilities enrolled in the eligible recipients’ vocational programs;
(ii) Assessed the vocational needs of those students; and
(iii) Developed an adequate plan to provide supplementary services sufficient to meet the needs of those students.
(b) For the purposes of this section, the term “State” includes only the fifty States, the District of Columbia, and the Commonwealth of Puerto Rico.
(a) A State desiring to participate in programs authorized by the Act shall designate or assign the head of the State office or other appropriate individual responsible for coordinating services under chapter 1 of title I of the Elementary and Secondary Education Act of 1965, as amended (chapter 1) (20 U.S.C. 2701
(1) The number of economically disadvantaged students has been identified; and
(2) The needs of economically disadvantaged students are being met as outlined in the applications of eligible recipients.
(b) For the purposes of this section, the term “State” includes only the fifty States, the District of Columbia, and the Commonwealth of Puerto Rico.
(a) A State desiring to participate in programs authorized by the Act shall designate or assign the head of the
(1) The number of students of limited English proficiency has been identified; and
(2) The needs of students of limited English proficiency for participation in vocational education programs are being met as outlined in the applications of eligible recipients.
(b) For the purposes of this section, the term “State” includes only the fifty States, the District of Columbia, and the Commonwealth of Puerto Rico.
(a) A State desiring to participate in the State Vocational and Applied Technology Education Program shall establish a State council on vocational education. The State council must be appointed—
(1) By the Governor; or
(2) By the State board of education, in a State in which the members of the State board of education are elected, including election by the State legislature.
(b) Each State shall certify to the Secretary the establishment and membership of the State council by June 1 prior to the beginning of each State plan period described in § 403.30.
(c) Each State shall recertify to the Secretary any new member of the State council not more than 60 days after a position on the State council is vacated.
(a) Each State council must be composed of 13 individuals, and must be broadly representative of citizens and groups within the State having an interest in vocational education.
(b) Each State council must consist of—
(1) Seven individuals who are representative of the private sector in the State and who must constitute a majority of the membership—
(i) Five of whom must be representatives of business, industry, trade organizations, and agriculture including—
(A) One member who is representative of small business concerns; and
(B) One member who is a private sector member of the State job training coordinating council established pursuant to section 122 of the JTPA; and
(ii) Two of whom must be representatives of labor organizations; and
(2) Six individuals, one of whom must be representative of special education, who are representative of—
(i) Secondary and postsecondary vocational institutions (equitably distributed among those institutions);
(ii) Career guidance and counseling organizations within the State; and
(iii) Individuals who have special knowledge and qualifications with respect to the special educational and career development needs of special populations, including women, disadvantaged individuals, individuals with disabilities, individuals with limited English proficiency, and minorities.
(c) The State council may include members of vocational student organizations and school boards but may not include employees of the State board of vocational education.
(d) In selecting individuals to serve on the State council on vocational education, the State shall give due consideration to the appointment of individuals who serve on a private industry council under the JTPA, or on State councils established under other related Federal programs.
(a)(1) The State council on vocational education shall meet as soon as practical after the Secretary accepts its certification and shall select from among its membership a chairperson who must be a representative of the private sector.
(2) The State council on vocational education shall adopt rules that govern
(b) Each State council on vocational education, during each State plan period described in § 403.30 unless otherwise indicated in the regulations in this section, shall—
(1) Meet with the State board or its representatives to advise on the development of the subsequent State plan, or any amendments to the current State plan, while the State plan or amendment is being developed;
(2) Make recommendations to the State board and make reports to the Governor, the business community, and general public of the State, concerning—
(i) The State plan;
(ii) Policies the State should pursue to strengthen vocational education, with particular attention to programs for individuals with disabilities; and
(iii) Initiatives and methods the private sector could undertake to assist in the modernization of vocational education programs;
(3) Analyze and report on the distribution of all vocational education funds in the State and on the availability of vocational education activities and services within the State;
(4) Consult with the State board on the establishment of evaluation criteria for vocational education programs within the State;
(5) Submit recommendations to the State board on the conduct of vocational education programs conducted in the State that emphasize the use of business concerns and labor organizations;
(6) Assess and report on the distribution of financial assistance under the Act, particularly the distribution of financial assistance between secondary vocational education programs and postsecondary vocational education programs;
(7) Recommend procedures to the State board to ensure and enhance the participation of the public in the provision of vocational education at the local level within the State, particularly the participation of local employers and local labor organizations;
(8) Report to the State board on the extent to which individuals who are members of special populations are provided with equal access to quality vocational education programs;
(9) Analyze and review corrections education programs; and
(10)(i) At least once every two years—
(A) Evaluate the extent to which vocational education, employment, and training programs in the State represent a consistent, integrated, and coordinated approach to meeting the economic needs of the State;
(B) Evaluate the vocational education program delivery system assisted under the Act, and the job training program delivery system assisted under the JTPA, in terms of the delivery systems’ adequacy and effectiveness in achieving the purposes of both Acts; and
(C) Make recommendations to the State board on the adequacy and effectiveness of the coordination that takes place between vocational education and the JTPA;
(ii) Comment on the adequacy or inadequacy of State action in implementing the State plan;
(iii) Make recommendations to the State board on ways to create greater incentives for joint planning and collaboration between the vocational education system and the job training system at the State and local levels; and
(iv) Advise, in writing, the Governor, the State board, the State job training coordinating council, the Secretary, and the Secretary of Labor of these findings and recommendations.
(c)(1) Each State council on vocational education may—
(i) Obtain the services of the professional, technical, and clerical personnel necessary to enable it to carry out its functions under the Act;
(ii) Contract for the services necessary to enable it to carry out its evaluation functions; and
(iii) Submit a statement to the Secretary reviewing and commenting upon the State plan.
(2)(i) The expenditure of funds awarded to a State council on vocational education by the Secretary must be
(ii) Each State council on vocational education shall designate an appropriate State agency, or other public agency, eligible to receive funds under the Act, to act as its fiscal agent for purposes of disbursement, accounting, and auditing.
(3) Each State council on vocational education shall carry out its functions, whether directly or by way of contract for services, independent of programmatic and administrative control by other State boards, agencies, and individuals.
(a) A State that desires to participate in the State Vocational and Applied Technology Education Program shall submit to the Secretary a State plan for a three-year period, in the case of the initial plan, and a two-year period thereafter, together with annual revisions the State board determines to be necessary.
(b) Each State shall carry out its programs under the State Vocational and Applied Technology Education Program on the basis of program years that coincide with program years under section 104(a) of the JTPA.
(c) The provisions of 34 CFR 76.103 do not apply to the State Vocational and Applied Technology Education Program.
(a) In formulating the State plan, and any amendments to the State plan, the State board shall meet with, and utilize, the State council on vocational education established under § 403.17.
(b) After providing appropriate and sufficient notice to the public, the State board shall conduct at least two public hearings in the State for the purpose of affording all segments of the public and interested organizations and groups an opportunity to present their views and make recommendations regarding the State plan.
(c) A State shall provide public notice of hearings on the State plan at least 30 days prior to the hearings.
(d) In developing a State plan, the State shall conduct an assessment according to § 403.203.
(e) The State board shall develop the portion of each State plan relating to the amount and uses of any funds proposed to be reserved for adult education, postsecondary education, tech-prep education, and secondary education after consultation with the State agency responsible for supervision of community colleges, technical institutes, or other two-year postsecondary institutions primarily engaged in providing postsecondary vocational education and the State agency responsible for secondary education. If a State agency finds that a portion of the final State plan is objectionable, that agency shall file its objections with the State board.
(f) The State board shall, in developing the State plan, take into consideration the relative training and retraining needs of secondary, adult, and postsecondary students.
(a)
(1) The State board will comply with the applicable requirements of titles I, II, III, and V of the Act and regulations implementing those requirements (including the maintenance of fiscal effort requirement in § 403.182);
(2) Eligible recipients will comply with the requirements of titles I, II,
(3) The State board will develop measurable goals and accountability measures for meeting the needs of individuals who are members of special populations;
(4) The State board will conduct adequate monitoring of projects, services, and activities conducted by eligible recipients to ensure that the eligible recipients are meeting the goals described in paragraph (a)(3) of this section;
(5) To the extent consistent with the number and location of individuals who are members of special populations enrolled in private secondary schools, the State will provide for the participation of those individuals in the vocational education projects, services, and activities assisted under §§ 403.112 and 403.113;
See 34 CFR 76.650-76.662, Participation of Students Enrolled in Private Schools.
(6) The State will comply with the provisions of § 403.180, and will distribute all of the funds reserved for the Secondary School Vocational Education Program and the Postsecondary and Adult Vocational Education Programs to eligible recipients pursuant to §§ 403.112, 403.113, and 403.116;
(7) The State will develop and implement a system of standards for performance and measures of performance for vocational education programs at the State level that meets the requirements of §§ 403.201 and 403.202;
(8) In the use of funds available for programs for single parents, displaced homemakers, or single pregnant women under § 403.81, the State will—
(i) Emphasize assisting individuals with the greatest financial need; and
(ii) Give special consideration to displaced homemakers who, because of divorce, separation, or the death or disability of a spouse, must prepare for paid employment;
(9) The State will furnish relevant training and vocational education activities to men and women who desire to enter occupations that are not traditionally associated with their sex;
(10) The State will fund programs of personnel development and curriculum development to further the goals identified in the State plan;
(11) The State has thoroughly assessed the vocational education needs of identifiable segments of the population in the State that have the highest rates of unemployment, and those needs are reflected in and addressed by the State plan;
(12) The State board will cooperate with the State council in carrying out the Board's duties under the State plan;
(13) None of the funds expended under the Act will be used to acquire equipment (including computer software) in any instance in which that acquisition results in a direct financial benefit to any organization representing the interests of the purchasing entity or its employees or any affiliate of such an organization;
(14) State and local funds will be used in the schools of each local educational agency that are receiving funds under the Act to provide services that, taken as a whole, are at least comparable to services being provided in schools in those agencies that are not receiving funds under the Act;
See §§ 403.194 and 403.200.
(15)(i) The State board will provide leadership (qualified by experience and knowledge in guidance and counseling), supervision, and resources for comprehensive career guidance, vocational counseling, and placement programs; and
(ii) As a component of the assurances described in paragraph (a)(15)(i) of this section, the State board will annually assess and include in the State plan a report on the degree to which expenditures aggregated within the State for career guidance and vocational counseling from allotments under title II of the Act are not less than expenditures for guidance and counseling within the State under the Carl D. Perkins Vocational Education Act in Fiscal or Program Year 1988;
(16) The State will provide for such fiscal control and fund accounting procedures as may be necessary to ensure the proper disbursement of, and accounting for, Federal funds paid to the State, including those funds paid by the State to eligible recipients under the Act;
(17) Funds made available under title II of the Act will be used to supplement, and to the extent practicable increase, the amount of State and local funds that would in the absence of those Federal funds be made available for the uses specified in the State plan and the local application, and in no case supplant those State or local funds;
See §§ 403.196 and 403.208.
(18) Individuals who are members of special populations will be provided with equal access to recruitment, enrollment, and placement activities;
(19) Individuals who are members of special populations will be provided with equal access to the full range of vocational education programs available to individuals who are not members of special populations, including occupationally specific courses of study, cooperative education, apprenticeship programs, and, to the extent practicable, comprehensive career guidance and counseling services, and will not be discriminated against on the basis of their status as members of special populations;
(20) Vocational education programs and activities for individuals with disabilities will be provided in the least restrictive environment in accordance with section 612(5)(B) of the IDEA and will, if appropriate, be included as a component of the individualized education program developed under section 614(a)(5) of that Act;
(21) Students with disabilities who have individualized education programs developed under section 614(a)(5) of the IDEA, with respect to vocational education programs, will be afforded the rights and protections guaranteed those students under sections 612, 614, and 615 of that Act;
(22) Students with disabilities who do not have individualized education programs developed under section 614(a)(5) of the IDEA or who are not eligible to have such a program, with respect to vocational education programs, will be afforded the rights and protections guaranteed those students under section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and, for the purpose of the State Vocational and Applied Technology Education Programs, those rights and protections will include making vocational education programs readily accessible to eligible individuals with disabilities through the provision of services described § 403.190(b)(3);
(23) Vocational education planning for individuals with disabilities will be coordinated among appropriate representatives of vocational education, special education, and State vocational rehabilitation agencies;
(24) The provision of vocational education to each student with disabilities will be monitored to determine if that education is consistent with the individualized education program developed for the student under section 614(a)(5) of the IDEA, in any case in which an individualized education program exists;
(25) The provision of vocational education will be monitored to ensure that disadvantaged students and students of limited English proficiency have access to that education in the most integrated setting possible;
(26)(i) The requirements of the Act relating to individuals who are members of special populations—
(A) Will be carried out under the general supervision of individuals in the appropriate State educational agency or State board who are responsible for students who are members of special populations; and
(B) Will meet education standards of the State educational agency or State board;
(ii) With respect to students with disabilities, the supervision carried out under paragraph (a)(26)(i) of this section will be carried out consistent with, and in conjunction with, supervision by the State educational agency or State board carried out under section 612(6) of the IDEA;
(27) Funds received under the Business-Labor-Education Partnership for Training Program will be awarded on a competitive basis solely for vocational
(i) Provide apprenticeships and internships in industry;
(ii) Provide new equipment;
(iii) Provide teacher internships or teacher training;
(iv) Bring representatives of business and organized labor into the classroom;
(v) Increase the access to, and quality of, programs for individuals who are members of special populations;
(vi) Strengthen coordination between vocational education programs and the labor and skill needs of business and industry;
(vii) Address the economic development needs of the area served by the partnership;
(viii) Provide training and career counseling that will enable workers to retain their jobs;
(ix) Provide training and career counseling that will enable workers to upgrade their jobs; and
(x) Address the needs of new and emerging industries, particularly industries in high-technology fields;
(28) In administering the Business-Labor-Education Partnership for Training Program, the State board will—
(i) Give preference to partnerships that coordinate with local chambers of commerce (or the equivalent), local labor organizations, or local economic development plans;
(ii) Give priority to programs offered by partnerships that provide job training in areas or skills where there are significant labor shortages; and
(iii) Ensure an equitable distribution of assistance under this part between urban and rural areas;
(29) Except as provided in paragraph (a)(30) of this section, not less than 50 percent of the aggregate cost of programs and projects assisted under the Business-Labor-Education Partnership for Training Program will be provided from non-Federal sources, and not less than 50 percent of the non-Federal share will be provided by businesses or labor organizations participating in the partnerships; and
(30) In the event that a partnership includes a small business or labor organization, 40 percent of the aggregate cost of the programs and projects assisted under the Business-Labor-Education Partnership for Training Program will be provided from non-Federal sources and not less than 50 percent of the non-Federal share will be provided by participating business or labor organizations.
(b)
(1) The procedures and criteria for, and the results of, each of the assessments required by § 403.203, including the needs identified by the assessments.
(2) The plans for the use of the funds and how those planned uses reflect the needs described in paragraph (b)(1) of this section.
(3) The manner in which the State will comply with the requirements in the Act regarding access and services for individuals who are members of special populations and a description of the responsiveness of programs to the special needs of those students.
(4) The estimated distribution, for each instructional level—secondary, postsecondary, and adult—of funds to corrections educational agencies as prescribed by § 403.100, of funds to local educational agencies, area vocational education schools, or intermediate educational agencies as prescribed by §§ 403.112 and 403.113, and of funds to eligible institutions or consortia of eligible institutions as prescribed by § 403.116.
(5) The criteria the State board will use —
(i) In approving applications of eligible recipients; and
(ii) For spending the amounts reserved for the State under § 403.180(b).
(6) How funds expended for occupationally specific training will be used for occupations in which job openings are projected or available, based on a labor market analysis that is not limited to the area in which the school is located.
(7) In each State plan submitted after Fiscal Year 1991, the progress the State
(8) The methods of administration necessary for the prompt and efficient administration of programs under the Act.
(9) How the State will implement program evaluations with eligible recipients as prescribed in §§ 403.191, 403.192, 403.201(a) (3) and (4), and 403.204.
(10) The methods proposed for the joint planning and coordination of programs carried out under the Act with programs conducted under the JTPA, the Adult Education Act (20 U.S.C. 1201
(11) Procedures by which an area vocational educational school, intermediate educational agency, or local educational agency may appeal decisions adverse to its interests with respect to programs assisted under the Act.
See 34 CFR 76.401.
(12) How the State will comply with the provisions of §§ 403.32(a)(18)-(26), 403.115, and 403.205.
(13) The State's rationale for distribution of funds under the Secondary School Vocational Education Program and the Postsecondary and Adult Vocational Education Programs.
(14) The State corrections educational agency or agencies designated to administer vocational education programs assisted under the Act, and the plan for the use of funds provided under § 403.180(b)(5).
(15) Any delegation of functions under § 403.12(c).
(16) The manner in which the State board will comply with the applicable requirements of titles I, II, III, and V of the Act (including the maintenance of fiscal effort requirements in § 403.182).
(17) A summary of recommendations made at public hearings on the State plan and the State board's response.
(18) How the State will determine which LEAs are located in a rural sparsely-populated area for purposes of § 403.112(d)(3).
(19) Which indices of economic status the State will use to determine the number of economically disadvantaged students attending vocational educational programs for the purposes of § 403.114.
(20) What method the State will use to distribute minimal amounts for the purpose of § 403.119(a).
(21) As appropriate, what method the State will use to distribute funds under § 403.118.
(c)
(1) A statement, if any, from the State advisory council on vocational education reviewing and commenting on the State plan;
(2) As necessary, the State's reasons for not accepting the recommendations of the State Committee of Practitioners for modifying standards and measures to be used in the statewide system of core standards and measures of performance; and
(3) As necessary, the State's response to any objections raised by State agencies consulted during the development of the State plan as required by § 403.31(e).
(a)(1) The State board shall submit its State plan for review and comment to the State job training coordinating council under section 122 of the JTPA not less than sixty days before the State plan is submitted to the Secretary.
(2) If the matters raised by the comments of the State job training coordinating council are not addressed in the State plan, the State board shall submit those comments to the Secretary with the State plan.
(b) The State board shall submit its State plan for review and comment to the State council on vocational education not less than sixty days before the State plan is submitted to the Secretary.
See § 403.19(c)(1)(iii).
(c) Each State plan must be submitted to the Secretary by May 1 preceding the beginning of the first fiscal year for which the plan is to be in effect.
(d) The State plan is considered to be the general application required by section 435 of the General Education Provisions Act (20 U.S.C. 1232d).
The State board, in consultation with the State council, shall submit amendments to the State plan to the Secretary when required by 34 CFR 76.140 or when changes in program conditions, labor market conditions, funding, or other factors require substantial amendment of an approved State plan. All amendments must be submitted for review by the State job training coordinating council and the State council on vocational education before submittal to the Secretary.
(a)(1) From funds made available under section 3(c) of the Act for the basic programs listed in § 403.60, and under section 3(d) of the Act for the special programs listed in § 403.130, the Secretary allots funds each fiscal year according to the provisions of section 101 of the Act to the 50 States, the Commonwealth of Puerto Rico, the District of Columbia, and the Virgin Islands.
(2) Upon approval of its State plan and any annual amendments, the Secretary makes one or more grant awards from those allotments to a State.
(b)(1) From funds made available under sections 3(b)(2) of the Act, the Secretary allots funds each fiscal year for State councils on vocational education according to the provisions of section 112(f)(1) of the Act.
(2) The Secretary makes an award to a State council upon the State council's submission of an annual budget covering the proposed expenditures of the State council for the following program year, and when the Secretary has determined that the State plan is in substantially approvable form.
(c) From funds made available under section 3(b)(1)(B) of the Act for the territories, the Secretary allots funds each fiscal year according to the provisions of section 101A(a) of the Act.
(d)(1) The Secretary awards funds remaining after allotments are made under paragraph (c) of this section to the Center for the Advancement of Pacific Education (CAPE) or its successor entity, such as the Pacific Regional Educational Laboratory.
(2) CAPE or its successor entity shall make grants for vocational education and training in Guam, American Samoa, Palau, the Commonwealth of the Northern Marianas, the Federated States of Micronesia, and the Republic of the Marshall Islands for the purpose of providing direct educational services, including—
(i) Teacher and counselor training and retraining;
(ii) Curriculum development; and
(iii) Improving vocational education and training programs in secondary schools and institutions of higher education (as defined in § 403.117(b)), or improving cooperative programs involving both secondary schools and institutions of higher education.
(3) CAPE may not use more than five percent of the funds received under paragraph (d)(1) of this section for administrative costs.
(a)(1) If the Secretary determines that any amount of a State's allotment under § 403.50(a) will not be required for any fiscal year for carrying out the program for which the allotment was made, the Secretary reallots those funds to one or more States that demonstrate a current need for additional
(2) The Secretary announces in the
(b)(1) No funds reallotted under paragraph (a) of this section may be used for any purpose other than the purposes for which they were appropriated.
(2) Any amount reallotted to a State under paragraph (a) of this section remains available for obligation during the succeeding fiscal year and is deemed to be part of the State's allotment for the fiscal year in which the reallotted funds are obligated.
(a)(1) The Secretary approves a State plan, or an amendment to a State plan, within sixty days of its receipt unless the plan or amendment is—
(i) Inconsistent with the requirements and purposes of the Act; or
(ii) Not of sufficient quality to meet the objectives of the Act, including the objective of developing and implementing program evaluations and improvements.
(2) Before the Secretary finally disapproves a State plan, or an amendment to a State plan, the Secretary gives reasonable notice and an opportunity for a hearing to the State board.
(b)(1) In reviewing a State plan, or an amendment to a State plan, the Secretary considers available comments from—
(i) The State council on vocational education;
(ii) The State agency responsible for supervision of community colleges, technical institutes, or other two-year postsecondary institutions primarily engaged in providing postsecondary vocational education;
(iii) The State agency responsible for secondary education;
(iv) The State Committee of Practitioners established under 34 CFR 400.6; and
(v) The State job training coordinating council.
(2) In reviewing an amendment to a State plan, the Secretary considers available comments from the State job training coordinating council and the State council on vocational education.
The following basic programs are authorized by title II of the Act:
(a) State Programs and State Leadership Activities.
(b) Programs for Single Parents, Displaced Homemakers, and Single Pregnant Women.
(c) Sex Equity Programs.
(d) Programs for Criminal Offenders.
(e) Secondary School Vocational Education Programs.
(f) Postsecondary and Adult Vocational Education Programs.
Projects, services, and activities described in §§ 403.70, 403.71, 403.81, 403.91, 403.101, and 403.111 may include—
(a) Work-site programs such as cooperative vocational education, programs with community-based organizations, work-study, and apprenticeship programs;
(b) Placement services and activities for students who have successfully completed vocational education programs; and
(c) Programs that involve students in addressing the needs of the community in the production of goods or services that contribute to the community's welfare or that involve the students with other community development planning, institutions, and enterprises.
(a) Any project assisted with funds made available for the basic programs must be of sufficient size, scope, and quality to give reasonable promise of
(b) Each State board receiving financial assistance for the basic programs may consider granting academic credit for vocational education courses that integrate core academic competencies.
(a) Unless otherwise indicated in the regulations in this part, a State board shall carry out projects, services, and activities under the State Vocational and Applied Technology Education Program—
(1) Directly;
(2) Through a school operated by the State board;
(3) Through awards to State agencies or institutions, such as vocational schools or correctional institutions; or
(4) Through awards to eligible recipients.
(b) For the purpose of paragraph (a) of this section, a State board acts directly if it—
(1) Carries out projects, services, or activities using its own staff (except at a school operated by the State board); or
(2) Contracts for statewide projects, services, or activities such as research, curriculum development, and teacher training.
(c) The regulations in this part also authorize a State to carry out certain projects, services, and activities under the State Vocational and Applied Technology Education Program by making an award to an entity other than an eligible recipient, such as a community-based organization, employers, private vocational training institutions, private postsecondary education institutions, labor organizations, and joint labor management apprenticeship programs.
(d) If projects, services, and activities are carried out by a school operated by the State board under paragraph (a)(2) of this section or are carried out by a State agency or institution under paragraph (a)(3) of this section, the requirements dealing with local applications (§§ 403.190 and 403.32(b)(5)(i)) apply in the same manner as to other eligible recipients.
A State shall use funds reserved under section 102(a)(3) of the Act for the State Programs and State Leadership Activities in accordance with § 403.180(b)(3) to conduct programs, projects, services, and activities that include—
(a) Professional development activities—
(1) For vocational teachers and academic teachers working with vocational education students, including corrections educators and counselors and educators and counselors in community-based organizations; and
(2) That include inservice and preservice training of teachers in programs and techniques, including integration of vocational and academic curricula, with particular emphasis on training of minority teachers;
(b) Development, dissemination, and field testing of curricula, especially curricula that—
(1) Integrate vocational and academic methodologies; and
(2) Provide a coherent sequence of courses through which academic and occupational skills may be measured; and
(c) Assessment of programs conducted with assistance under the Act including the development of—
(1) Performance standards and measures for those programs; and
(2) Program improvement and accountability with respect to those programs.
In addition to the required activities in § 403.70, a State may use funds reserved under section 102(a)(3) of the Act for the State Programs and State
(a) The promotion of partnerships among business, education (including educational agencies), industry, labor, community-based organizations, or governmental agencies;
(b) The support for tech-prep education as described in 34 CFR part 406;
(c)(1) The support of vocational student organizations that are an integral part of the vocational education instructional program, especially with respect to efforts to increase minority participation in those organizations.
(2) The support of vocational student organizations may include, but is not limited to, expenditures for—
(i) The positions of State executive secretaries and State advisors for vocational student organizations;
(ii) Leadership development workshops;
(iii) The development of curriculum for vocational student organizations; and
(iv) Field or laboratory work incidental to vocational training so long as the activity is supervised by vocational education personnel who are qualified in the occupational area and is available to all students in the instructional program without regard to membership in any student organization.
(3) The support of vocational student organizations may not include—
(i) Lodging, feeding, conveying, or furnishing transportation to conventions or other forms of social assemblage;
(ii) Purchase of supplies, jackets, and other effects for students’ personal ownership;
(iii) Cost of non-instructional activities such as athletic, social, or recreational events;
(iv) Printing and disseminating non-instructional newsletters;
(v) Purchase of awards for recognition of students, advisors, and other individuals; or
(vi) Payment of membership dues;
(d) Leadership and instructional programs in technology education; and
(e) Data collection.
Eligible recipients and community-based organizations are eligible for an award under the Single Parents, Displaced Homemakers, and Single Pregnant Women Program.
A State shall use funds reserved in accordance with § 403.180(b)(2)(i) for individuals who are single parents, displaced homemakers, or single pregnant women only to—
(a) Provide, subsidize, reimburse, or pay for preparatory services, including instruction in basic academic and occupational skills, necessary educational materials, and career guidance and counseling services in preparation for vocational education and training that will furnish single parents, displaced homemakers, and single pregnant women with marketable skills;
(b) Make grants to eligible recipients for expanding preparatory services and vocational education services if the expansion directly increases the eligible recipients’ capacity for providing single parents, displaced homemakers, and single pregnant women with marketable skills;
(c) Make grants to community-based organizations for the provision of preparatory and vocational education services to single parents, displaced homemakers, and single pregnant women if the State determines that the community-based organizations have demonstrated effectiveness in providing comparable or related services to single parents, displaced homemakers, and single pregnant women, taking into account the demonstrated performance of such organizations in terms of cost, the quality of training, and the characteristics of the participants;
(d) Make preparatory services and vocational education and training more
(e) Provide information to single parents, displaced homemakers, and single pregnant women to inform those individuals of vocational education programs, related support services, and career counseling.
The programs and services described in § 403.81 may be provided in postsecondary or secondary school settings, including area vocational education schools, and community-based organizations that meet the requirements of § 403.81(c), that serve single parents, displaced homemakers, and single pregnant women.
Eligible recipients and community-based organizations are eligible for an award under the Sex Equity Program.
Except as provided in § 403.92, each State shall use amounts reserved for the Sex Equity Program in accordance with § 403.180(b)(2)(ii) only for—
(a) Programs, services, comprehensive career guidance and counseling, and activities to eliminate sex bias and stereotyping in secondary and postsecondary vocational education;
(b) Preparatory services and vocational education programs, services, and activities for girls and women, aged 14 through 25, designed to enable the participants to support themselves and their families; and
(c) Support services for individuals participating in vocational education programs, services, and activities described in paragraphs (a) and (b) of this section, including dependent-care services and transportation.
The individual appointed under § 403.13(a) may waive the requirement in § 403.91(b) with respect to age limitations if the individual determines (through appropriate research) that the waiver is essential to meet the objectives of § 403.91.
(a) The State Board shall designate one or more State corrections educational agencies to administer programs assisted under the Act for juvenile and adult criminal offenders in correctional institutions in the State including correctional institutions operated by local authorities.
(b) Each State corrections educational agency that desires to be designated under paragraph (a) of this section shall submit to the State board a plan for the use of funds.
In administering programs receiving funds reserved under § 403.180(b)(5) for criminal offenders, each State corrections educational agency designated under § 403.100(a) shall—
(a) Give special consideration to providing—
(1) Services to offenders who are completing their sentences and preparing for release; and
(2) Grants for the establishment of vocational education programs in correctional institutions that do not have such programs;
(b) Provide vocational education programs for women who are incarcerated;
(c) Improve equipment; and
(d) In cooperation with eligible recipients, administer and coordinate vocational education services to offenders before and after their release.
Each State corrections educational agency designated under § 403.100(a) shall meet the requirements in §§ 403.191 and 403.192.
(a) Subject to the requirements of paragraph (c) of this section, the following entities are eligible for an award under the Secondary School Vocational Education Program:
(1) A local educational agency.
(2) An area vocational education school or intermediate educational agency that meets the requirements in § 403.113.
(b) Subject to the requirements of paragraph (c) of this section, the following entities are eligible for an award under the Postsecondary and Adult Vocational Education Programs:
(1) An institution of higher education as defined in § 403.117(b), including a nonprofit institution that satisfies the conditions set forth in § 403.111(d)(14).
(2) A local educational agency serving adults.
(3) An area vocational education school serving adults that offers or will offer a program that meets the requirements of § 403.111 and seeks to receive assistance under the Secondary School Vocational Education Program or the Postsecondary and Adult Vocational Education Programs.
(c) Only an entity that provides or will provide vocational education in a program that meets the requirements of § 403.111 is eligible to receive an award under the Secondary School Vocational Education Program or the Postsecondary and Adult Vocational Education Program.
(a)(1) Each eligible recipient that receives an award under § 403.112, § 403.113, or § 403.116 shall use funds under that award to improve vocational education programs.
(2) Projects assisted with funds awarded under § 403.112, § 403.113, or § 403.116 must—
(i) Provide for the full participation of individuals who are members of special populations by providing the supplementary and other services required by § 403.190(b) necessary for them to succeed in vocational education; and
See appendix A to part 403 and §§ 403.190(c) and 403.193(e).
(ii) Operate at a limited number of sites or with respect to a limited number of program areas.
(3) If an eligible recipient that receives an award under § 403.112, § 403.113, or § 403.116 meets the requirements in this section and §§ 403.190(b) and 403.193, it may use those Federal funds to serve students who are not members of special populations.
(b) Each eligible recipient that receives an award under § 403.112, § 403.113, or § 403.116 shall give priority for assistance under those sections to sites or program areas that serve the highest concentrations of individuals who are members of special populations.
Methods by which an eligible recipient may give priority to sites or program areas that serve the highest concentrations of individuals who are members of special populations include, but are not limited to, the following:
(a) First, a local educational agency ranks each site based on the percentage of the
(b) Second, the local educational agency establishes a funding cut-off point for sites above the district-wide percentage of special populations enrollment. The local educational agency funds sites above the cut-off point but does not fund sites below that point.
(a) First, a postsecondary institution ranks each program area based on the percentage of the program area's total enrollment of students who are members of special populations.
(b) Second, the postsecondary institution establishes a funding cut-off point for program areas that rank above the institution-wide average percentage of special populations enrollment. The postsecondary institution funds projects in a program area that is above the cut-off point but does not fund projects in program areas below that point.
(a) First, an LEA or postsecondary institution identifies a site with a high concentration of special populations;
(b) Second, the LEA or postsecondary institution identifies a program area at the site (such as health occupations) in which the participation rate for members of special populations has been lower than the overall rate of participation for members of special populations at the site; and
(c) Third, the LEA or postsecondary institution funds a project at the site designed to improve the participation rate of members of special populations in that program area.
Absolute counts of special population members may be used to determine the sites or program areas with the highest concentrations of special population members instead of, or in combination with, percentages of special population members.
(c) Funds made available from an award under § 403.112, § 403.113, or § 403.116 must be used to provide vocational education in programs that—
(1) Are of sufficient size, scope, and quality as to be effective;
(2) Integrate academic and vocational education in those programs through coherent sequences of courses so that students achieve both academic and occupational competencies; and
(3) Provide for the equitable participation of members of special populations in vocational education consistent with the assurances and requirements in §§ 403.190(b) and 403.193, so that these populations have an opportunity to enter vocational education that is equal to that afforded to the general student population.
See appendix A to part 403.
(d) In carrying out the provisions of paragraph (c) of this section, an eligible recipient under §§ 403.112, 403.113, or § 403.116 may use funds for activities that include, but are not limited to—
(1) Upgrading of curriculum;
(2) Purchase of equipment, including instructional aids;
(3) Inservice training of both vocational instructors and academic instructors working with vocational education students for integrating academic and vocational education;
(4) Guidance and counseling;
(5) Remedial courses;
(6) Adaptation of equipment;
(7) Tech-prep education programs;
(8) Supplementary services designed to meet the needs of special populations;
(9) Payment in whole or in part with funds under § 403.112, § 403.113, or § 403.116 for a special populations coordinator, who must be a qualified counselor or teacher, to ensure that individuals who are members of special populations are receiving adequate services and job skill training;
(10) Apprenticeship programs;
(11) Programs that are strongly tied to economic development efforts in the State;
(12) Programs that train adults and students for all aspects of an occupation in which job openings are projected or available;
(13) Comprehensive mentor programs in institutions of higher education offering comprehensive programs in teacher preparation, which seek to use fully the skills and work experience of individuals currently or formerly employed in business and industry who are interested in becoming classroom instructors and to meet the need of vocational educators who wish to upgrade their teaching competencies; or
(14) Provision of education and training through arrangements with private
(a)
(b)
(1) From 70 percent of the amount reserved, an LEA must be allocated an amount that bears the same relationship to the 70 percent as the amount the LEA was allocated under section 1005 of chapter 1 (20 U.S.C. 2711) in the fiscal or program year preceding the fiscal or program year in which the allocation is made bears to the total amount received under section 1005 of chapter 1 by all LEAs in the State in that preceding year.
(2) From 20 percent of the amount reserved, an LEA must be allocated an amount that bears the same relationship to the 20 percent as the number of students with disabilities who have individualized education programs under section 614(a)(5) of the IDEA served by the LEA in the fiscal or program year preceding the fiscal or program year in which the allocation is made bears to the total number of those students served by all LEAs in the State in that preceding year.
(3) From 10 percent of the amount reserved, an LEA must be allocated an amount that bears the same relationship to the 10 percent as the number of students enrolled in schools and adults enrolled in vocational education training programs under the jurisdiction of the LEA in the fiscal or program year preceding the fiscal or program year in which the allocation is made bears to the number of students enrolled in schools in kindergarten through 12th grade and adults enrolled in vocational education training programs under the jurisdiction of all LEAs in the State in that preceding year.
Assume that a State has reserved $5,000,000 of its basic programs funds under Title II of the Act for secondary school programs.
(a)(1) All LEAs in the State were allocated a total of $80,000,000 under section 1005 of Chapter 1 in the preceding fiscal year. Of that amount, school district “A” was allocated $400,000.
(2) The allocation for school district “A” is calculated by multiplying $3,500,000 (70 percent of $5,000,000) by .005 of the State total ($400,000÷$80,000,000). The allocation for school district “A” would be $17,500 under paragraph (b)(1) of this section.
(b)(1) All LEAs in a State served a total of 100,000 students with disabilities who have individualized education programs under section 614(a)(5) of the IDEA in the preceding fiscal year. Of that total, school district “A” served 400 of those students in the preceding fiscal year.
(2) The allocation for school district “A” is calculated by multiplying $1,000,000 (20 percent of $5,000,000) by .004 of the State total (400÷100,000). The allocation for school district “A” would be $4,000 under paragraph (b)(2) of this section.
(c)(1) All LEAs in a State enrolled a total of 1,000,000 students (including adults enrolled in vocational education training programs in those LEAs) in the preceding fiscal year. Of that number school district “A” enrolled 3,500 of those students in the preceding fiscal year.
(2) The allocation for school district “A” is calculated by multiplying 500,000 (10 percent of $5,000,000) by .0035 of the State total (3,500÷1,000,000). The allocation for school district “A” would be $1,750 under paragraph (b)(3) of this section.
(c)
(1) If an LEA that operates only elementary schools sends its graduating students to a single local or regional educational agency that provides secondary school services to secondary school students in the same attendance area, a State shall distribute to that local or regional educational agency any amounts under paragraph (b) of this section that would otherwise have been allocated to LEAs operating only elementary schools.
(2) If an LEA that operates only elementary schools sends its graduating students to two or more local or regional educational agencies that provide secondary school services to secondary students in the same attendance area, the State shall distribute to those local or regional educational agencies an amount based on the proportionate number of students each agency received in the previous year from the LEA that operates only elementary schools.
(d)(1)
(2)(i) An LEA may enter into a consortium with one or more LEAs for the purpose of providing services under the Secondary School Vocational Education Program in order to meet the minimum grant requirement in paragraph (d)(1) of this section.
(ii) A consortium arrangement under paragraph (d)(2)(i) of this section must serve primarily as a structure for operating joint projects that provide services to all participating local educational agencies.
(iii) A project operated by a consortium must meet the size, scope, and quality requirement of § 403.111(c)(1).
Under the distribution formula for the Secondary School Vocational Education Program, three LEAs earn $5,000 each (which is less than the $15,000 minimum grant amount for each LEA). The LEAs form a consortium in order to receive an award. One of the LEAs is designated as the fiscal agent for the consortium and receives the $15,000 award for the consortium. The consortium may operate and fund with the $15,000 a project or projects for the benefit of all participating LEAs. The fiscal agent of the consortium may not subgrant back to the participating LEAs the amounts they contributed to the consortium.
(3) A State may waive paragraph (d)(1) of this section in any case in which the LEA—
(i) Is located in a rural, sparsely populated area;
(ii) Demonstrates that it is unable to enter into a consortium for purposes of providing services under the Secondary School Vocational Education Program; and
(iii) Demonstrates that the projects to be assisted meet the size, scope, and quality requirements in § 403.111(c)(1).
(4) Any amounts that are not distributed by reason of paragraph (d)(1) of this section must be redistributed in accordance with the provisions in paragraph (b) of this section.
See 34 CFR 403.113(d).
(a) A State shall distribute funds reserved under § 403.112(a) directly to the appropriate area vocational education school or intermediate educational agency in any case in which—
(1) The area vocational education school or intermediate educational agency and an LEA—
(i) Have formed or will form a consortium for the purpose of receiving funds reserved under § 403.112(a); or
(ii) Have entered into or will enter into a cooperative arrangement for the purpose of receiving funds reserved under § 403.112(a); and
(2)(i) The area vocational education school or intermediate educational agency serves a proportion of students with disabilities and students who are economically disadvantaged that is approximately equal to or greater than the proportion of those students attending the secondary schools under the jurisdiction of all of the LEAs sending students to the area vocational education school or the intermediate educational agency; or
(ii) The area vocational education school or intermediate educational agency demonstrates that it is unable to meet the criterion in paragraph (a)(2)(i) of this section due to the lack of interest by students with disabilities and students who are economically disadvantaged in attending vocational education programs in that area vocational education school or intermediate educational agency.
(b) If an area vocational education school or intermediate educational agency meets the requirements of paragraph (a) of this section, then the amount that would otherwise be allocated to the LEA may be distributed to the area vocational education school, the intermediate educational agency, and the LEA—
(1) Based on each school's or entity's relative share of students with disabilities and students who are economically disadvantaged who are attending vocational education programs that meet the requirements of § 403.111 (based, if practicable, on the average enrollment for the prior 3 years); or
(2) On the basis of an agreement between the LEA and the area vocational education school or intermediate educational agency.
(c) Notwithstanding paragraphs (a) and (b) of this section, and §§ 403.114 and 403.115, prior to distributing funds to any LEA that would receive an allocation that is not sufficient to conduct a program that meets the requirements of § 403.111(c), a State shall encourage the LEA to—
(1) Form a consortium or enter a cooperative agreement with an area vocational education school or intermediate educational agency offering programs that meet the requirements of § 403.111(c), and that are accessible to economically disadvantaged students and students with disabilities that would be served by the LEA; and
(2) Transfer its allocation to an area vocational education school or intermediate educational agency.
(d) If an LEA's allocation under § 403.112 meets the minimum grant requirement in § 403.112(d), and the allocation is distributed in part to an area vocational education school or an intermediate educational agency pursuant to paragraphs (a) and (b) of this section, the LEA may retain the amount not distributed to the area vocational education school or an intermediate educational agency even though that amount is less than the minimum grant required by § 403.112(d).
(a) For the purposes of § 403.113, a State may determine the number of economically disadvantaged students attending vocational education programs on any of the following bases:
(1) Eligibility for one of the following:
(i) Free or reduced-price meals under the National School Lunch Act (42 U.S.C. 1751
(ii) The program for aid to Families with Dependent Children under part A of title IV of the Social Security Act (42 U.S.C. 601).
(iii) Benefits under the Food Stamp Act of 1977 (7 U.S.C. 2011).
(iv) To be counted for purposes of section 1005 of chapter 1.
(v) Participation in programs assisted under title II of the JTPA.
(2) Receipt of a Pell grant or assistance under a comparable State program of need-based financial assistance.
(3) Status of an individual who is determined by the Secretary to be low-income according to the latest available data from the Department of Commerce or the Department of Health and Human Services Poverty Guidelines.
(4) Other indices of economic status, including estimates of those indices, if the State demonstrates to the satisfaction of the Secretary that those indices are more representative of the number of economically disadvantaged students attending vocational education programs. The Secretary determines, on a case-by-case basis, whether other indices of economic status are more representative of the number of economically disadvantaged students attending vocational education programs, taking into consideration, for example, the statistical reliability of
(b) If a State elects to use more than one factor described in paragraph (a) of this section for purposes of determining the number of economically disadvantaged students enrolled in vocational education programs, the State shall ensure that the data used are not duplicative.
The State board shall establish an appeals procedure for resolution of any dispute arising between an LEA and an area vocational education school or an intermediate educational agency with respect to the allocation procedures described in §§ 403.112 and 403.113, including the decision of an LEA to leave a consortium.
See 34 CFR 76.401, Disapproval of an application—opportunity for a hearing.
(a)
(b)
(2) Except as provided in paragraph (c) of this section and §§ 403.118 and 403.119, each eligible institution or consortium of eligible institutions must receive an amount that bears the same relationship to the amount of funds reserved for the Postsecondary and Adult Vocational Education Programs as the number of Pell Grant recipients and recipients of assistance from the Bureau of Indian Affairs enrolled in programs meeting the requirements of § 403.111, including meeting the definition of vocational education in 34 CFR 400.4, offered by the eligible institution or consortium of eligible institutions in the fiscal or program year preceding the fiscal or program year in which the allocation is made bears to the number of those recipients enrolled in these programs within the State in that preceding year.
(c)
(2) Any amounts that are not allocated by reason of paragraph (c)(1) of this section must be redistributed to eligible institutions or consortia of eligible institutions in accordance with the provisions of paragraph (b) of this section.
(d) In order for a consortium of eligible institutions to receive assistance under this section, the consortium must operate joint projects that—
(1) Provide services to all postsecondary institutions participating in the consortium; and
(2) Are of sufficient size, scope, and quality as to be effective.
For the purposes of §§ 403.116, 403.118, and 403.120 the following definitions apply:
(a)
(b)(1)
(i) Admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of that certificate, or who are beyond the age of compulsory school attendance;
(ii) Is legally authorized within the State to provide a program of education beyond secondary education;
(iii) Provides an educational program for which it awards a bachelor's degree or provides not less than a two-year program which is acceptable for full credit toward such a degree, or in the case of a hospital or health care facility, that provides training of not less than one year for graduates of accredited health professions programs, leading to a degree or certificate upon completion of that training;
(iv) Is a public or other nonprofit institution; and
(v) Is accredited by a nationally recognized accrediting agency or association approved by the Secretary for this purpose or, if not so accredited—
(A) Is an institution with respect to which the Secretary has determined that there is satisfactory assurance, considering the resources available to the institution, the period of time, if any, during which it has operated, the effort it is making to meet accreditation standards, and the purpose for which this determination is being made, that the institution will meet the accreditation standards of such an agency or association within a reasonable time; or
(B) Is an institution whose credits are accepted, on transfer, by not less than three institutions that are so accredited, for credit on the same basis as if transferred from an institution so accredited.
(2) This term also includes any school that provides not less than a one-year program of training to prepare students for gainful employment in a recognized occupation and that meets the provisions of paragraphs (b)(1) (i), (ii), (iv), and (v) of this definition. If the Secretary determines that a particular category of these schools does not meet the requirements of paragraph (b)(1)(v) because there is no nationally recognized accrediting agency or association qualified to accredit schools in that category, the Secretary, pending the establishment of such an accrediting agency or association, appoints an advisory committee, composed of persons specially qualified to evaluate training provided by schools in that category, that must—
(i) Prescribe the standards of content, scope, and quality that must be met in order to qualify schools in that category to participate in the program pursuant to this part; and
(ii) Determine whether particular schools not meeting the requirements of paragraph (b)(1)(v) of this definition meet those standards.
(c)
The Secretary may waive § 403.116(b)(2) for any fiscal or program year for which a State submits to the Secretary an application for such a waiver that—
(a) Demonstrates that the formula in § 403.116(b)(2) does not result in a distribution of funds to the institutions or consortia of eligible institutions within the State that have the highest numbers of economically disadvantaged individuals and that an alternative formula would result in such a distribution.
(b) Includes a proposal for an alternative formula that may include criteria relating to the number of individuals attending institutions or consortia of eligible institutions within the State who—
(1) Receive need-based postsecondary financial aid provided from public funds;
(2) Are members of families participating in the program for aid to families with dependent children under part A of title IV of the Social Security Act (42 U.S.C. 601);
(3) Are enrolled in postsecondary educational institutions that—
(i) Are funded by the State;
(ii) Do not charge tuition; and
(iii) Serve only economically disadvantaged students;
(4) Are enrolled in programs serving economically disadvantaged adults;
(5) Are participants in programs assisted under the JTPA;
(6) Are Pell Grant recipients; and
(c) Proposes an alternative formula that—
(1) Includes direct counts of students enrolled in the institutions or consortia of eligible institutions;
(2) Directly relates to the status of students as economically disadvantaged individuals;
(3) Is to be uniformly applied to all eligible institutions;
(4) Does not include fund pools for specific types of institutions or consortia of eligible institutions;
(5) Does not include the direct assignment of funds to a particular institution or consortium of eligible institutions on a non-formula basis; and
(6) Identifies a more accurate count of economically disadvantaged individuals in the aggregate than does the formula in § 403.116(b)(2).
(a) This section applies in any fiscal or program year in which a State reserves 15 percent or less under § 403.180(b)(1) for distribution under—
(1) The Secondary School Vocational Education Program; or
(2) The Postsecondary and Adult Vocational Education Programs.
(b) Notwithstanding the provisions and § 403.112, § 403.113, or § 403.116, as applicable, in order to result in a more equitable distribution of funds for programs serving the highest numbers of economically disadvantaged individuals, the State may distribute the funds described in paragraph (a) of this section—
(1) On a competitive basis; or
(2) Through any alternative method determined by the State.
(a) In any fiscal or program year that an LEA, area vocational school, intermediate school district, or consortium of those entities, or an eligible institution, or consortium of eligible institutions, does not obligate all of the amounts it is allocated for that year under the Secondary School Vocational Education Program or the Postsecondary and Adult Vocational Education Programs, the LEA, area vocational education school, intermediate school district, or consortium of those entities, or the eligible institution, or consortium of eligible institutions, shall return any unobligated amounts to the State to be reallocated under § 403.112(b), § 403.113, or § 403.116(b), as applicable.
(b) In any fiscal or program year in which amounts allocated under § 403.112(b), § 403.113, § 403.116(b), or § 403.118 are returned to the State and the State is unable to reallocate those amounts according to those sections in time for the amounts to be obligated in the fiscal or program year, the State shall retain the amounts to be distributed in combination with amounts reserved under § 403.112(b), § 403.113, § 403.116(b), or § 403.118 for the following fiscal or program year.
The following special programs are authorized by title III of the Act and are subject to the requirements of the State plan:
(a) State Assistance for Vocational Education Support Programs by Community-Based Organizations.
(b) Consumer and Homemaking Education Program.
(c) Comprehensive Career Guidance and Counseling Programs.
(d) Business-Labor-Education Partnerships for Training Program.
(a) The fifty States, the District of Columbia, Puerto Rico, and the Virgin Islands are eligible for an award under the—
(1) State Assistance for Vocational Education Support and Programs by Community-Based Organizations;
(2) Consumer and Homemaking Education Programs; and
(3) Comprehensive Career Guidance and Counseling Programs.
(b) States, as defined in 34 CFR 400.4(b), are eligible for the Business-Labor-Education Partnerships for Training Program.
(a) The State shall provide, in accordance with its State plan, and from its allotment for this program, financial assistance to joint projects of eligible recipients and community-based organizations within the State that provide the following special vocational education services and activities:
(1) Outreach programs that facilitate the entrance of youth into a program of transitional services and subsequent entrance into vocational education, employment, or other education and training.
(2) Transitional services such as attitudinal and motivational prevocational training programs.
(3) Prevocational educational preparation and basic skills development conducted in cooperation with business concerns.
(4) Special prevocational preparations programs targeted to inner-city youth, non-English speaking youth, Appalachian youth, and the youth of other urban and rural areas having a high density of poverty who need special prevocational education programs.
(5) Career intern programs.
(6) Model programs for school dropouts.
(7) The assessment of students’ needs in relation to vocational education and jobs.
(8) Guidance and counseling to assist students with occupational choices and with the selection of a vocational education program.
(b) Individuals with disabilities who are educationally or economically disadvantaged may participate in projects under this program.
(a) Each community-based organization and eligible recipient that desire to participate in this program shall jointly prepare and submit an application to the State board at the time and in the manner established by the State board.
(b) The State board also may establish requirements relating to the contents of the applications, except that each application must contain—
(1) An agreement among the community-based organization and the eligible recipients in the area to be served that includes the designation of one or more fiscal agents for the project;
(2) A description of how the funds will be used, together with evaluation criteria to be applied to the project;
(3) Assurances that the community-based organization will give special consideration to the needs of severely economically and educationally disadvantaged youth, ages sixteen through twenty-one, inclusive;
(4) Assurances that business concerns will be involved, as appropriate, in services and activities for which assistance is sought;
(5) A description of the efforts the community-based organization will make to collaborate with the eligible recipients participating in the joint project;
(6) A description of the manner in which the services and activities for which assistance is sought will serve to enhance the enrollment of severely economically and educationally disadvantaged youth into the vocational education programs; and
(7) Assurances that the projects conducted by the community-based organization will conform to the applicable standards of performance and measures of effectiveness required of vocational education programs in the State.
(a) The State shall conduct, in accordance with its State plan, and from its allotment for this program, consumer and homemaking education projects that may include—
(1) Instructional projects, services, and activities that prepare youth and adults for the occupation of homemaking;
(2) Instruction in the areas of—
(i) Food and nutrition;
(ii) Individual and family health;
(iii) Consumer education;
(iv) Family living and parenthood education;
(v) Child development and guidance;
(vi) Housing and home management, including resource management; and
(vii) Clothing and textiles.
(b) The State shall use the funds for this program for projects, services, and activities—
(1) For residents of economically depressed areas;
(2) That encourage the participation of traditionally underserved populations;
(3) That encourage, in cooperation with the individual appointed under § 403.13(a), the elimination of sex bias and sex stereotyping;
(4) That improve, expand, and update Consumer and Homemaking Education Programs, especially those that specifically address needs described in paragraphs (b) (1), (2), and (3) of this section; and
(5) That address priorities and emerging concerns at the local, State, and national levels.
(c) The State may use the funds described in paragraph (a) of this section for—
(1) Program development and the improvement of instruction and curricula relating to—
(i) Managing individual and family resources;
(ii) Making consumer choices;
(iii) Balancing work and family;
(iv) Improving responses to individual and family crises (including family violence and child abuse);
(v) Strengthening parenting skills (especially among teenage parents);
(vi) Preventing teenage pregnancy;
(vii) Assisting the aged, individuals with disabilities, and members of at risk populations (including the homeless);
(viii) Improving individual, child, and family nutrition and wellness;
(ix) Conserving limited resources;
(x) Understanding the impact of new technology on life and work;
(xi) Applying consumer and homemaking education skills to jobs and careers; and
(xii) Other needs as determined by the State; and
(2) Support services and activities designed to ensure the quality and effectiveness of programs, including—
(i) The demonstration of innovative and exemplary projects;
(ii) Community outreach to underserved populations;
(iii) The application of academic skills (such as reading, writing, mathematics, and science) through consumer and homemaking education programs;
(iv) Curriculum development;
(v) Research;
(vi) Program evaluation;
(vii) The development of instructional materials;
(viii) Teacher education;
(ix) The upgrading of equipment;
(x) Teacher supervision;
(xi) State leadership, including the activities of student organizations; and
(xii) State administration, subject to § 403.151(c).
(a) A State shall use not less than one-third of its allotment under the Consumer and Homemaking Education Program in economically depressed areas or areas with high rates of unemployment for projects, services, and activities designed to assist consumers, and to help improve the home environment and the quality of family life.
(b)(1) The State board shall ensure that the experience and information gained through carrying out projects, services, and activities under this program are shared with program administrators for the purpose of program planning.
(2) The State board shall use funds from its allotment under this program to provide State leadership and one or more full-time State administrators qualified by experience and educational preparation in home economics education.
(3) For purposes of the Consumer and Homemaking Education Program, State leadership includes, but is not limited to, curriculum development, personnel development, research, dissemination activities, and technical assistance.
(c) A State may use, in addition to funds reserved under § 403.180(b)(4), not more than six percent of its allotment under this program for State administration of projects, services, and activities under this program.
(a) The State shall conduct, in accordance with its State plan, from its allotment for this program, career guidance and counseling projects, services, and activities that are—
(1) Organized and administered by certified counselors; and
(2) Designed to improve, expand, and extend career guidance and counseling programs to meet the career development, vocational education, and employment needs of vocational education students and potential students.
(b) The purposes of the projects, services, and activities described in paragraph (a) of this section must be to—
(1) Assist individuals to—
(i) Acquire self-assessment, career planning, career decision-making, and employability skills;
(ii) Make the transition from education and training to work;
(iii) Maintain the marketability of their current job skills in established occupations;
(iv) Develop new skills to move away from declining occupational fields and enter new and emerging fields in high-technology areas and fields experiencing skill shortages;
(v) Develop mid-career job search skills and to clarify career goals; and
(vi) Obtain and use information on financial assistance for postsecondary and vocational education, and job training; and
(2)(i) Encourage the elimination of sex, age, disabling conditions, and race bias and stereotyping;
(ii) Provide for community outreach;
(iii) Enlist the collaboration of the family, the community, business, industry, and labor; and
(iv) Be accessible to all segments of the population, including women, minorities, individuals with disabilities, and economically disadvantaged individuals.
(c) The projects, services, and activities described in paragraph (a) of this section must consist of—
(1) Instructional activities and other services at all educational levels to help students develop the skills described in paragraph (b)(1) of this section;
(2) Services and activities designed to ensure the quality and effectiveness of career guidance and counseling projects such as—
(i) Counselor education, including the education of counselors working with individuals with limited English proficiency;
(ii) Training support personnel;
(iii) Curriculum development;
(iv) Research and demonstration projects;
(v) Experimental projects;
(vi) The development of instructional materials;
(vii) The acquisition of equipment;
(viii) State and local leadership;
(ix) The development of career information delivery systems; and
(x) Local administration, including supervision;
(xi) State administration, including supervision, subject to § 403.161(c);
(3) Projects that provide opportunities for counselors to obtain firsthand experience in business and industry; and
(4) Projects that provide students with an opportunity to become acquainted with business, industry, the labor market, and training opportunities, including secondary educational programs that—
(i) Have at least one characteristic of an apprenticeable occupation as recognized by the Department of Labor or the State Apprenticeship Agency, in accordance with the National Apprenticeship Act (29 U.S.C. 50);
(ii) Are conducted in concert with local business, industry, labor, and other appropriate apprenticeship training entities; and
(iii) Are designed to prepare participants for an apprenticeable occupation or provide information concerning apprenticeable occupations and their prerequisites.
(a) A State shall use not less than twenty percent of its allotment under the Career Guidance and Counseling Program for projects, services, and activities designed to eliminate sex, age, and race bias and stereotyping under § 403.160(b)(2) to ensure that projects, services, and activities under this program are accessible to all segments of the population, including women, disadvantaged individuals, individuals with disabilities, individuals with limited English proficiency, and minorities.
(b)(1) The State board shall ensure that the experience and information gained through carrying out projects, services, and activities under this program are shared with program administrators for the purpose of program planning.
(2) The State board shall use funds from its allotment under this program to provide State leadership that is qualified by experience and knowledge in guidance and counseling.
(3) For purposes of Comprehensive Career Guidance and Counseling Programs, State leadership includes, but is not limited to curriculum development, personnel development, research, dissemination activities, and technical assistance; and
(c) A State may use, in addition to funds reserved under § 403.180(b)(4), not more than six percent of its allotment under this program for State administration of projects, services, and activities under this program.
The State board shall, in accordance with the State plan, from its allotment for this program, support the establishment and operation of projects, services, and activities, that—
(a) Provide incentives for the coordination of the Business-Labor-Education Partnership for Training Program with related efforts under the—
(1) National Tech-Prep Education Program in 34 CFR part 405;
(2) State-Administered Tech-Prep Education Program in 34 CFR part 406; and
(3) JTPA; and
(b) May only include, in addition to the activities described in § 403.32(a)(27) through (30),—
(1) Training and retraining of instructional and guidance personnel;
(2) Curriculum development and the development or acquisition of instructional and guidance equipment and materials;
(3) Acquisition and operation of communications and telecommunications equipment and other high technology equipment for programs authorized by this part;
(4) Other activities authorized by title III of the Act as may be essential to the successful establishment and operation of projects, services, and activities under the Business-Labor-Education Partnership for Training Program, including activities and related services to ensure access of women, minorities, individuals with disabilities, and economically disadvantaged individuals; and
(5) Providing vocational education to individuals in order to assist their entry into, or advancement in, high-technology occupations or to meet the technological need of other industries or businesses.
(a) The State board awards subgrants or contracts to partnerships between—
(1) An area vocational education school, a State agency, a local educational agency, a secondary school funded by the Bureau of Indian Affairs, an institution of higher education, a State corrections educational agency, or an adult learning center; and
(2) Business, industry, labor organizations, or apprenticeship programs.
(b) A partnership receiving an award from a State board must include as partners at least one entity from paragraph (a)(1) of this section and at least one entity from paragraph (a)(2) of this section, and may include more than one entity from each group.
The State board, in approving projects, services, and activities assisted under the Business-Labor-Education Partnership Training Program, shall give special consideration to the following:
(a) The level and degree of business and industry participation in the development and operation of the program.
(b) The current and projected demand within the State or relevant labor market area for workers with the level and type of skills the program is designed to produce.
(c) The overall quality of the proposal, with particular emphasis on the probability of successful completion of the program by prospective trainees and the capability of the eligible recipient, with assistance from participating business or industry, to provide high quality training for skilled workers and technicians in high technology.
(d) The commitment to serve, as demonstrated by special efforts to provide outreach, information, and counseling, and by the provision of remedial instruction and other assistance, all segments of the population, including women, minorities, individuals with disabilities, and economically disadvantaged individuals.
(e) Projects, services, and activities to provide vocational education for individuals who have attained 55 years of age in order to assist their entry into, or advancement in, high-technology occupations or to meet the technological needs of other industries or businesses.
The State board shall use funds awarded under the Business-Labor-Education Partnership for Training Program only for—
(a) Expenses incurred in carrying out the programs, services, and activities described in § 403.170, including, for example, expenses for—
(1) The introduction of new vocational education programs, particularly in economically depressed urban and rural areas;
(2) The introduction or improvement of basic skills instruction, including English-as-a-second-language instruction, in order for an individual to be eligible for employment, to continue employment, or to be eligible for career advancement;
(3) Costs associated with coordination between vocational education programs, business, and industry, including advisory council meetings and newsletters; and
(4) Transportation and child-care services for students necessary to ensure access of women, minorities, individuals with disabilities, and economically disadvantaged individuals to projects, services, and activities authorized by the Business-Labor-Education Partnership for Training Program; and
(b)(1) Subject to paragraph (b)(2) of this section, expenditures for necessary and reasonable administrative costs of the State board and of eligible partners.
(2) Total expenditures for administrative costs of the State board and of eligible partners may not exceed 10 percent of the State's allotment for this program in the first year and five percent of that allotment in each subsequent year.
(a) The business and industrial share of the costs required in § 403.32(a)(29) may be in the form of either allowable costs or the fair market value of in-kind contributions such as facilities, overhead, personnel, and equipment.
(b) The State board shall use equal amounts from its allotment under this program and from its allotment for basic programs to provide the Federal share of cost of projects, services, and activities under this program.
(c) If an eligible partner demonstrates to the satisfaction of the State that it is incapable of providing all or part of the non-Federal portion of the costs of projects, services, and activities, as required by § 403.32(a)(29), the State board may designate funds available under parts A and C of title II of the Act or funds available from State sources in place of the non-Federal portion.
(a)(1) Except as provided in paragraph (a)(2) of this section, each State shall reserve from its allotment under the basic programs authorized by title II of the Act, for—
(i) The Program for Single Parents, Displaced Homemakers, and Single Pregnant Women under § 403.81, and the Sex Equity Program under § 403.91, respectively, an amount that is not less than the amount the State reserved for each of those programs under section 202 of the Carl D. Perkins Vocational Education Act (CDPVEA) from its Fiscal Year (FY) 1991 grant from the FY 1990 appropriation; and
(ii) The Program for Criminal Offenders under § 403.101 an amount that is not less than—
(A) The amount the State reserved for projects, services, or activities under section 202(6) of the CDPVEA from its FY 1991 grant from the FY 1990 appropriation; and
(B) The amount of Federal funds under the CDPVEA, other than the one percent reserved under section 202(6) of the Act, that the State and its eligible recipients obligated for projects, services, and activities for criminal offenders in correctional institutions from its FY 1991 grant from the FY 1990 appropriation.
(2) In any year in which a State receives an amount for purposes of carrying out programs under title II of the Act that is less than the amount the State received for those purposes in its FY 1991 grant award from the FY 1990 appropriation under the CDPVEA, the
(b) Except as provided in paragraph (a) of this section, from its allotment for the basic programs authorized by title II of the Act, a State shall reserve—
(1) At least 75 percent for the Secondary School Vocational Education Program and the Postsecondary and Adult Vocational Education Programs described in § 403.111;
(2) Ten and one-half percent for the Program for Single Parents, Displaced Homemakers, and Single Pregnant Women described in § 403.81 and the Sex Equity Program described in § 403.91, as follows:
(i) Not less than seven percent for the Program for Single Parents, Displaced Homemakers, and Single Pregnant Women.
(ii) Not less than three percent for the Sex Equity Program;
(3) Not more than eight and one-half percent for State Programs and State Leadership Activities described in §§ 403.70 and 403.71;
(4) Not more than five percent or $250,000, whichever is greater, for administration of the State plan, of which—
(i) Not less than $60,000 must be available for carrying out the provisions in § 403.13, regarding the personnel requirements for eliminating sex discrimination and sex stereotyping; and
(ii) The remaining amounts may be used for the costs of—
(A) Developing the State plan;
(B) Reviewing local applications;
(C) Monitoring and evaluating program effectiveness;
(D) Providing technical assistance;
(E) Ensuring compliance with all applicable Federal laws, including required services and activities for individuals who are members of special populations; and
(F) Supporting the activities of the technical committees it establishes under § 403.12(b)(1); and
(5) One percent for Programs for Criminal Offenders described in § 403.101.
(c) The procedure for meeting the “hold-harmless” requirements in § 403.180(a) and the $250,000 minimum for State administration provision in § 403.180(b)(4) is as follows:
(1) If the five percent reserved for administration is less than the $250,000 minimum allowed by paragraph (b)(4) of this section, or if any of the amounts reserved for the Program for Single Parents, Displaced Homemakers, and Single Pregnant Women in § 403.81, the Sex Equity Program in § 403.91, or the Program for Criminal Offenders in § 403.101, respectively, is less than the amount reserved for that program in FY 1990 (funds from the FY 1990 appropriation awarded in the States FY 1991 grant), a State shall subtract any amount necessary to satisfy the $250,000 minimum for State administration or any of the “hold-harmless” amounts from the total basic programs award received by the State.
(2) The State shall reserve $250,000 for administration and shall reserve for any program not meeting the “hold-harmless” requirement an amount necessary to meet that requirement.
(3) The State shall reserve from the remainder of the basic program award an amount for each of the remaining programs that is proportionate to the amount that program would have received in the absence of a shortfall in the amounts reserved for administration or to meet the “hold-harmless” requirements in paragraph (a)(1) of this section.
(a) A State receives a basic programs award of $4,000,000. Five percent of the basic programs award equals $200,000, which is $50,000 less than the $250,000 minimum that may be reserved for State administration. To determine the amount of funds that will be reserved for each program under title II, parts A, B, and C of the Act, the State first subtracts $250,000 for State administration from the $4,000,000 basic programs award ($4,000,000 −$250,000 = $3,750,000).
(b) Second, the State determines the amount that would have been reserved for each of the programs under title II, parts A, B, and C of the Act in the absence of a shortfall in the set-aside amount for administration, as follows:
(c) Third, the State converts each of these amounts into a percentage by dividing each amount by the sum of the amounts the programs would have received in the absence of a shortfall ($3,800,000) and multiplies the remaining basic programs award ($3,750,000) by these percentages to determine the amount to reserve for each program under parts A, B, and C of title II of the Act, as follows:
This example assumes that amounts reserved meet the “hold-harmless” requirement of section 102(c)(1) of the Act.
A State's seven percent reserve from its FY 1992 grant for the Program for Single Parents, Displaced Homemakers, and Single Pregnant Women is $1,400,000 and the amount reserved for that program from its FY 1991 grant was $1,581,000. Therefore, the amount of FY 1992 funds reserved for that program is $181,000 less than the amount reserved in FY 1991. The State received a basic programs award of $20,000,000 in FY 1992. The other programs under title II, part B meet the “hold-harmless” requirement in § 403.180(a)(1), and the amount reserved for State administration exceeds $250,000. The State determines the amount of funds to be reserved for each program under title II, parts A, B, and C of the Act as follows:
(a) First, the State subtracts $1,581,000 from the $20,000,000 total basic programs award ($20,000,000 −$1,581,000 = $18,419,000).
(b) Second, the State determines the amount that would have been reserved for each of the programs under parts A, B, and C of title II of the Act in the absence of a shortfall in the set-aside amount for the Program for Single Parents, Displaced Homemakers, and Single Pregnant Women, as follows:
(c) Third, the State converts each of these amounts into a percentage by dividing each amount by the sum of the amounts the programs would have earned in the absence of a shortfall ($18,600,000) and multiplies the remaining basic programs award ($18,419,000) by these percentages to determine the amount to reserve for each program under parts A, B, and C of title II of the Act, as follows:
This example assumes that amounts reserved for the Sex Equity Program and Programs for Criminal Offenders meet the “hold-harmless” requirement of section 102(c) (1) and (2) of the Act.
A State's one percent reserved from its FY 1992 grant for Programs for Criminal Offenders is $200,000 and the amount reserved for that program under section 202(6) of the CDPVEA plus other amounts obligated for projects, services, and activities for criminal offenders in correctional institutions from its FY 1991 grant from the FY 1990 appropriations totals $250,000. Therefore, the amount of FY 1992 funds reserved for that program is $50,000 less than the amount reserved and obligated for that program in FY 1991. The State received a basic programs award of $20,000,000 in FY 1992. The other programs under title II, part B meet the “hold-harmless” requirement of § 403.180(a)(1) and the amount reserved for State administration exceeds $250,000. The State determines the amount of funds to be reserved for each program under title II, parts A, B, and C of the Act as follows:
(a) First, the State subtracts $250,000 from the $20,000,000 total basic programs award ($20,000,000 −$250,000 = $19,750,000).
(b) Second, the State determines the amount that would have been reserved for each of the programs under parts A, B, and C of title II of the Act in the absence of a shortfall in the set-aside amount for the Programs for Criminal Offenders, as follows:
(c) Third, the State converts each of these amounts into a percentage by dividing each amount by the sum of the amounts the programs would have earned in the absence of a shortfall ($19,800,000) and multiplies the remaining basic programs award ($19,750,000) by these percentages to determine the amount to reserve for each program under parts A, B, and C of title II of the Act, as follows:
This example assumes that amounts reserved for the Sex Equity Program and for the Program for Single Parents, Displaced Homemakers, and Single Pregnant Women meet the “hold-harmless” requirement of sections 102(c) (1) and (2) of the Act.
(d) The procedure for meeting the ratable reduction provision in paragraph (a)(2) of this section is as follows:
(1) If a State's basic programs award under title II of the Act for FY 1992 or in future years is less than that State's basic grant amount in FY 1991, a State shall determine the percentage that the basic programs award is of the FY 1991 basic programs award.
(2) The State shall multiply the amounts reserved in FY 1991 for each of the three programs covered by the “hold-harmless” provisions in paragraph (a)(1) of this section by this percentage.
(3) The State shall compare the amounts that would be reserved for these programs in FY 1992 to determine if these amounts are less than the ratably reduced hold-harmless amounts, and if so, shall proceed with the calculation required by paragraph (c) of this section except using the ratably reduced “hold-harmless” amounts.
(a) A State shall match, from non-Federal sources and on a dollar-for-dollar basis, the funds reserved for administration of the State plan under § 403.180(b)(4).
(b) The matching requirement under paragraph (a) of this section may be applied overall, rather than line-by-line, to State administrative expenditures.
(c) A State shall provide from non-Federal sources for State administration under the Act an amount that is not less than the amount provided by the State from non-Federal sources for State administrative costs for the preceding fiscal or program year.
From the five percent reserved for the administration of the State plan, a State must reserve $60,000 to carry out the provisions in § 403.13. The $60,000 must be matched, but the matching funds need not be used for the activities described in § 403.13.
The Secretary may not make a payment under the Act to a State for any fiscal year unless the Secretary determines that the fiscal effort per student, or the aggregate expenditures of that
(a) The Secretary may waive the maintenance of effort requirement in § 403.182 for a State for one year only if—
(1) The Secretary determines that a waiver would be equitable due to exceptional or uncontrollable circumstances affecting the State's ability to maintain fiscal effort; and
(2) The State has decreased its expenditures for vocational education from non-Federal sources by no more than five percent.
(b) For purposes of this section, “exceptional or uncontrollable circumstances” include, but are not limited to, the following:
(1) A natural disaster.
(2) An unforeseen and precipitous decline in financial resources.
(c) The Secretary does not consider tax initiatives or referenda to be exceptional or uncontrollable circumstances.
A State seeking a waiver of the maintenance of effort requirement in § 403.182 shall—
(a) Submit to the Secretary a request for a waiver; and
(b) Include in the request—
(1) The reason for the request;
(2) Information that demonstrates that a waiver is justified; and
(3) Any additional information the Secretary may require.
If a State has been granted a waiver of the maintenance of effort requirement that allows it to receive a grant for a fiscal year, the Secretary determines whether the State has met that requirement for the grant to be awarded for the year after the year of the waiver by comparing the amount spent for vocational education from non-Federal sources in the first preceding fiscal year (or program year) with the amount spent in the third preceding fiscal year (or program year).
Because exceptional or uncontrollable circumstances prevented a State from maintaining its level of fiscal effort in a program year 1989 (July 1, 1988-June 30, 1989) at the level of its fiscal effort in program year 1988 (July 1, 1987-June 30, 1988), the Secretary granted the State a waiver of the maintenance of effort requirement that permits the State to receive its fiscal year 1990 grant (a grant that is awarded on or after July 1, 1990 from funds appropriated in the fiscal year 1990 appropriation). To be eligible to receive its fiscal year 1991 grant (the grant to be awarded for the year after the year of the waiver), the State's expenditures from the first preceding program year (July 1, 1989-June 30, 1990) must equal or exceed its expenditures from the third preceding program year (July 1, 1987 to June 30, 1988).
(a)
(b)
(2) In addition to the funds reserved under § 403.180(b)(4), a State may use only an amount of funds from its allotment for the State Assistance for Vocational Education Support Programs by Community-Based Organizations that is necessary and reasonable for the proper and efficient State administration of that program.
(3) In addition to the funds reserved under § 403.180(b)(4), a State may use
(a) Except as provided in paragraph (b) of this section, a State may use only an amount of the funds reserved for each of the basic programs listed in § 403.60 and the special programs listed in § 403.130 to pay the costs of providing technical assistance that is necessary and reasonable to promote or enhance the quality and effectiveness of that program.
(b) A State may not use funds reserved under § 403.180(b)(1) for the Secondary School Vocational Education Program and the Postsecondary and Adult Vocational Education Program to pay the costs of providing technical assistance.
(c) In providing technical assistance under paragraph (a) of this section, a State may not use amounts to an extent that would interfere with achieving the purposes of the program for which the funds were awarded.
A State is not required to use non-Federal funds to pay the cost of services and activities that it provides to members of special populations pursuant to § 403.32(a) (18)-(26) or to pay the cost of services and activities that eligible recipients provide to members of special populations pursuant to §§ 403.111 (a)(2)(i) and (c)(3), 403.190(b), or 403.193, unless this requirement is imposed by other applicable laws.
(a) Each eligible recipient desiring financial assistance under the Secondary School Vocational Education Program or the Postsecondary and Adult Vocational Education Program must submit to the State board, according to requirements established by the State board, an application covering the same period as the State plan, for the use of that assistance. The State board shall determine requirements for local applications, except that each application must—
(1) Contain a description of—
(i) The vocational education program to be funded, including—
(A) The extent to which the program incorporates each of the requirements described in § 403.111 (a), (b), and (c); and
(B) How the eligible recipient will use the funds available under § 403.112, § 403.113, or § 403.116 and from other sources to improve the program with regard to each requirement and activity described in § 403.111 (c) and (d);
(ii) How the needs of individuals who are members of special populations will be assessed and the planned use of funds to meet those needs;
(iii) How access to programs of good quality will be provided to students who are economically disadvantaged (including foster children), students with disabilities, and students of limited English proficiency through affirmative outreach and recruitment efforts;
(iv) The program evaluation standards the applicant will use to measure its progress;
(v) The methods to be used to coordinate vocational education services with relevant programs conducted under the JTPA, including cooperative arrangements established with private industry councils established under section 102(a) of that Act, in order to avoid duplication and to expand the range of and accessibility to vocational education services;
(vi) The methods used to develop vocational educational programs in consultation with parents and students of special populations;
(vii) How the eligible recipient coordinates with community-based organizations;
(viii) The manner and the extent to which the eligible recipient considered the demonstrated occupational needs of the area in assisting programs funded under the Act;
(ix) How the eligible recipient will provide a vocational education program that—
(A) Integrates academic and occupational disciplines so that students participating in the program are able to achieve both academic and occupational competence; and
(B) Offers coherent sequences of courses leading to a job skill; and
(x) How the eligible recipient will monitor the provision of vocational education to individuals who are members of special populations, including the provision of vocational education to students with individualized education programs developed under the IDEA;
(2) Provide assurances that—
(i) The programs funded under § 403.112, § 403.113, or § 403.116 will be carried out according to the requirements regarding special populations;
(ii) The eligible recipient will provide a vocational program that—
(A) Encourages students through counseling to pursue coherent sequences of courses;
(B) Assists students who are economically disadvantaged, students of limited English proficiency, and students with disabilities to succeed through supportive services such as counseling, English-language instruction, child care, and special aids;
(C) Is of a size, scope, and quality as to bring about improvement in the quality of education offered by the school; and
(D) Seeks to cooperate with the sex equity program carried out under § 403.91; and
(iii) The eligible recipient will provide sufficient information to the State to enable the State to comply with the requirements in § 403.113; and
(3) Contain a report on the number of individuals in each of the special populations.
(b) Each eligible recipient desiring financial assistance under title II of the Act must provide assurances to the State board that, with respect to any project that is funded under a basic program listed in § 403.60 or a special program listed in § 403.130, it will—
(1) Assist students who are members of special populations to enter vocational education programs, and, with respect to students with disabilities, assist in fulfilling the transitional service requirement of section 626 of the IDEA;
(2) Assess the special needs of students participating in projects receiving assistance under a basic program listed in § 403.60 or a special program listed in § 403.130, with respect to their successful completion of the vocational education program in the most integrated setting possible;
(3) Provide supplementary services, as defined in 34 CFR 400.4(b), to students who are members of special populations;
(4) Provide guidance, counseling, and career development activities conducted by professionally trained counselors and teachers who are associated with the provision of those special services; and
(5) Provide counseling and instructional services designed to facilitate the transition from school to post-school employment and career opportunities.
(c) Each eligible recipient desiring financial assistance under Title II of the Act must provide the services and activities described in paragraph (b) of this section, to the extent possible with funds awarded under the Act, and indicate in its local application whether any non-Federal funds will be used for this purpose.
See § 403.193(e).
(d) Each eligible recipient desiring financial assistance under the Act shall provide sufficient information to the State, as the State board requires, to demonstrate to the State board that the eligible recipient's projects comply with § 403.32(a)(18)-(26).
(e) Each eligible recipient desiring financial assistance under the Act shall—
(1) Provide the assurance described in § 403.14(a)(2); and
(2) Include in its application, as appropriate—
(i) The number of disabled students, economically disadvantaged students, and students with limited English proficiency in its vocational program;
(ii) An assessment of the vocational needs of its students with disabilities, economically disadvantaged students, and students with limited English proficiency; and
(iii) A plan to provide supplementary services sufficient to meet the needs identified in the assessment described in paragraph (e)(2)(ii).
(a)(1) Beginning in the 1992-1993 school year, each recipient of financial assistance under § 403.112, § 403.113, or § 403.116 shall evaluate annually the effectiveness of the particular projects, services, and activities receiving assistance under a basic program listed in § 403.60, or a special program listed in § 403.130, unless the State board determines pursuant to § 403.201(a)(3) that a broader evaluation is required. A recipient may conduct the evaluation required under this paragraph by evaluating either the entire population of participants or a representative sample of participants.
(2) The annual evaluation must be based on the standards and measures developed by the State board in accordance with §§ 403.201 and 403.202, including any modifications made by the recipient in accordance with paragraph (b) of this section.
(b)(1) Each recipient may modify the State standards and measures based on—
(i) Economic, geographic, or demographic factors; or
(ii) The characteristics of the populations to be served.
(2) Modifications must conform to the assessment criteria contained in the State plan.
(c) Each recipient, as part of the annual evaluation required in paragraph (a) of this section, and with the full participation of representatives of special populations, shall—
(1) Identify and adopt strategies to overcome barriers that are resulting in lower rates of access to, or success in, vocational education programs for members of special populations; and
(2) Evaluate the progress of individuals who are members of special populations.
(d) Each recipient, as a part of the annual evaluation required in paragraph (a) of this section, shall evaluate its progress in providing vocational education students with strong experience in and understanding of all aspects of the industries the students are preparing to enter.
(e) Each recipient may use funds awarded under a basic program listed in § 403.60 or a special program listed in § 403.130 to support the cost of conducting the evaluation required under paragraphs (a) through (d) of this section to the extent that the costs are—
(1) Reasonable and necessary;
(2) Related to the purposes for which the funds were awarded; and
(3) Consistent with applicable requirements, such as the requirement in § 403.196 to use funds awarded under title II of the Act to supplement, and not to supplant, State and local funds.
(a) If, beginning not less than one year after implementing the program evaluation required in § 403.191, a recipient determines, through its annual evaluation, that it is not making substantial progress in meeting the standards and measures developed by the State under §§ 403.201 and 403.202, the recipient shall develop a plan for program improvement for the succeeding school year.
(b) The plan must be developed in consultation with teachers, parents, and students concerned with or affected by the program, and must describe how the recipient will identify
(1) Vocational education and career development strategies designed to achieve progress in improving the effectiveness of the recipient's projects, services, and activities receiving assistance under the programs listed in §§ 403.60 and 403.130 evaluated under § 403.191(a)(1); and
(2) If necessary, the strategies designed to improve supplementary services provided to individuals who are members of special populations.
See 34 CFR 403.204.
(a)(1) Each local educational agency that receives funds under Title II of the Act shall provide to students who are members of special populations and their parents information concerning—
(i) The opportunities available in vocational education;
(ii) The requirements for eligibility for enrollment in those vocational education programs;
(iii) Special courses that are available;
(iv) Special services that are available;
(v) Employment opportunities; and
(vi) Placement.
(2) Each area vocational education school or intermediate educational agency that receives funds under title II of the Act shall provide the information described in paragraph (a)(1) of this section to the students who are members of special populations and their parents in any local educational agency whose allocation was distributed in its entirety under § 403.113 to the area vocational education school or intermediate educational agency.
(b) The information described in paragraph (a)(1) of this section must be provided at least one year before the students enter, or are of an appropriate age for, the grade level in which vocational education programs are first generally available in the State, but in no case later than the beginning of the ninth grade.
(c) Each eligible institution or consortium of eligible institutions that receives funds under Title II of the Act shall—
(1) Provide the information described in paragraph (a)(1) of this section to each individual who requests information concerning, or seeks admission to, vocational education programs offered by the institution or consortium of eligible institutions; and
(2) If appropriate, assist in the preparation of applications relating to that admission.
(d) Information described under paragraph (a)(1) of this section must, to the extent practicable, be in a language and form that parents and students understand.
(e) An eligible recipient is not required by this part to use non-Federal funds to pay the cost of services and activities required by this section and §§ 403.111(a)(2)(i) and (c)(3) and 403.190(b) unless this requirement is imposed by other applicable laws.
(a) A local educational agency may receive an award of Federal funds under the State plan only if—
(1) The local educational agency uses State and local funds to provide services in secondary schools or sites served with Federal funds awarded under the State plan that, taken as a whole, are at least comparable to those services being provided in secondary schools or sites that are not being served with Federal funds awarded under the State plan; or
(2) In the event that the local educational agency serves all its secondary schools or sites with Federal funds awarded under the State plan, the local educational agency uses State and local funds to provide services that, taken as a whole, are substantially comparable in each secondary school or site.
See appendix B to part 403.
(b) The comparability requirements in paragraph (a) of this section do not apply to—
(1) A local educational agency with only one secondary school or site; or
(2) A consortium composed of more than one local educational agency, except that, within a consortium, each local educational agency itself must meet the comparability requirements unless it is exempt under paragraph (b)(1) of this section.
(c)(1) A local educational agency shall develop written procedures for complying with the comparability requirements in paragraph (a) of this section, including a process for demonstrating annually that State and local funds are used to provide services in served schools and sites that are at least comparable to the services provided with State and local funds in schools or sites in the local educational agency that are not served with funds awarded under the State plan.
(2) In reaching the determination as to whether comparability requirements in paragraph (a) of this section were met, the local educational agency's written procedures—
(i) Do not have to take into account unpredictable changes in student enrollment or personnel assignments that occur after the beginning of a school year; and
(ii) May not take into account any State and local funds spent in carrying out the following types of programs:
(A) Special local programs designed to meet the educational needs of educationally deprived children, including compensatory education for educationally deprived children, that were excluded in the preceding fiscal year from comparability determinations under section 1018(d)(1)(B) of chapter 1 (20 U.S.C. 2728(d)(1)(B)).
(B) Bilingual education for children of limited English proficiency.
(C) Special education for children with disabilities.
(D) State phase-in programs that were excluded in the preceding fiscal year from comparability determinations under section 1018(d)(2)(B) of chapter 1 (20 U.S.C. 2728(d)(2)(B)).
(a) Except as provided in paragraphs (b) and (c) of this section, each eligible recipient, including a State corrections educational agency, that receives an award under a basic program listed in § 403.60 or a special program listed in § 403.130, may use no more than the amount of funds from each award that is necessary and reasonable for the proper and efficient administration of the projects, services, and activities for which the award was made.
(b) Each eligible recipient that receives an award under § 403.112, § 403.113, or § 403.116 may use no more than five percent of those funds for administrative costs.
(c) Each eligible partner that receives an award under the Business-Labor-Education Partnership for Training Program may use no more funds under that award for administrative costs than the amounts prescribed in § 403.173(b).
(a) Funds made available under title II of the Act must be used to supplement, and to the extent practicable increase the amount of State and local funds that would in the absence of funds under title II of the Act be made available for the purposes specified in the State plan and the local application.
(b) Notwithstanding paragraph (a) of this section and § 403.32(a)(17), funds made available under title II of the Act may be used to pay the costs of vocational education services required by an individualized education program developed pursuant to sections 612(4) and 614(a)(5) of the IDEA (20 U.S.C. 1412(4) and 1414(a)(5)), in a manner consistent with section 614(a)(1) of that Act, and services necessary to meet the
(c) Any expenditures pursuant to paragraph (b) of this section must increase the amount of funds that would otherwise be available to meet the costs of an individualized education program or to comply with section 504 of the Rehabilitation Act of 1973.
(a) Equipment purchased with funds under § 403.112, § 403.113, or § 403.116, when not being used to carry out the purposes of the Act for which it was purchased, may be used for other vocational education purposes if the acquisition of the equipment was reasonable and necessary for the purpose of conducting a properly designed project or activity under the Secondary School Vocational Education Program or the Postsecondary and Adult Vocational Education Program.
(b) Equipment purchased with funds under § 403.112, § 403.113, or § 403.116, when not being used to carry out the purposes of the Act for which it was purchased or other vocational education purposes, may be used for other instructional purposes if—
(1) The acquisition of the equipment was reasonable and necessary for the purpose of conducting a properly designed project or activity under the Secondary School Vocational Education Program or the Postsecondary and Adult Vocational Education Program; and
(2) The other use of the equipment is after regular school hours or on weekends.
(c) The use of equipment under paragraphs (a) and (b) of this section must—
(1) Be incidental to the use of that equipment for the purposes under the Secondary School Vocational Education Program or the Postsecondary and Adult Vocational Education Program for which it was purchased;
(2) Not interfere with the use of that equipment for the purposes under the Secondary School Vocational Education Program or the Postsecondary and Adult Vocational Education Program for which it was purchased; and
(3) Not add to the cost of using that equipment for the purposes under the Secondary School Vocational Education Program or the Postsecondary and Adult Vocational Education Program for which it was purchased.
(a) The State board may not make a payment under the Act to a local educational agency unless the LEA is in compliance with § 403.194. As indicated in § 403.194(a), an LEA may demonstrate its compliance with the comparability requirements by filing an appropriate assurance.
(b) The State board shall monitor each local educational agency's compliance with the comparability requirements in § 403.194.
(c) If, after a local educational agency receives an award of Federal funds under the State plan, the local educational agency is found not to be in compliance with the comparability requirements, the State board shall—
(1) Withhold all or a portion of the local educational agency's grant award, but not less than the amount or percentage by which the local educational agency failed to achieve comparability under the local educational agency's procedures established pursuant to § 403.194(c); or
(2) Require repayment of the amount or percentage by which the local educational agency failed to achieve comparability if the local educational agency is found not to be in compliance after the period of availability of the funds awarded has ended.
(a)(1) Each State board receiving funds under the Act shall develop and implement a statewide system of core standards and measures of performance for secondary, postsecondary, and adult vocational education programs.
(2) This system must—
(i) Be developed and implemented by September 25, 1992; and
(ii) Apply to all programs assisted under the Act.
(3) The State board must determine whether a recipient of funds under § 403.112, § 403.113, or § 403.116 must evaluate more than the particular projects, services, and activities receiving assistance under a basic program listed in § 403.60 or a special program listed in § 403.130 in order to carry out a valid, reliable, and otherwise meaningful evaluation of the effectiveness of these projects, services, and activities as required by § 403.191(a)(1), using the standards and measures developed pursuant to paragraph (a)(1) of this section.
(4) If a State board determines under paragraph (a)(3) of this section that a recipient must evaluate more than the particular projects, services, and activities receiving assistance under a basic or special program, the State board shall—
(i) Determine whether the entire local vocational education program—or which projects, services, and activities in addition to the ones assisted under a basic or special program—must be evaluated to assess the effectiveness of the particular projects, services, and activities receiving assistance under a basic program or a special program; and
(ii) Require a recipient to conduct an evaluation consistent with the State board's determination under paragraph (a)(4)(i) of this section.
(b) To assist in the development and implementation of the Statewide system addressed in paragraph (a) of this section, the State board shall appoint a State Committee of Practitioners (Committee), as prescribed in 34 CFR 400.6.
(c) The State board shall convene the Committee on a regular basis to review, comment on, and propose revisions to the State board's draft proposal for a system of core standards and measures of performance for vocational education programs assisted under the Act.
(d) To assist the Committee in formulating recommendations for modifying standards and measures of performance, the State board shall provide the Committee with information concerning differing types of standards and measures including—
(1) The advantages and disadvantages of each type of standard or measure; and
(2) Instances in which those standards and measures—
(i) Have been effective; and
(ii) Have not been effective.
(a) The statewide system of core standards and measures of performance for vocational education programs must include—
(1) Measures of learning and competency gains, including student progress in the achievement of basic and more advanced academic skills;
(2) One or more measures of the following:
(i) Student competency attainment.
(ii) Job or work skill attainment or enhancement including student progress in achieving occupational skills necessary to obtain employment in the field for which the student has been prepared, including occupational skills in the industry the student is preparing to enter.
(iii) Retention in school or completion of secondary school or its equivalent.
(iv) Placement into additional training or education, military service, or employment;
(3) Incentives or adjustments that are—
(i) Designed to encourage service to targeted groups or special populations; and
(ii) Developed for each student, and, if appropriate, consistent with the student's individualized education program developed under section 614(a)(5) of the IDEA; and
(4) Procedures for using existing resources and methods developed in other programs receiving Federal assistance.
(b) In developing the standards and measures included in the system developed under paragraph (a) of this section, the State board shall take into consideration and shall provide, to the extent appropriate, for consistency with—
(1) Standards and measures developed under job opportunities and basic skills training programs established and operated under a plan approved by the Secretary of Health and Human Services that meets the requirements of section 402(a)(19) of the Social Security Act (42 U.S.C. 687); and
(2) Standards prescribed by the Secretary of Labor under section 106 of the JTPA.
See 34 CFR 400.6.
(a) Each State board receiving assistance under the Act shall conduct an assessment of the quality of vocational education programs throughout the State using measurable objective criteria.
(b) In developing the assessment criteria, the State board shall—
(1) Consult with representatives of the groups described in 34 CFR 400.6(c); and
(2) Use information gathered by the National Occupational Information Coordinating Committee and, if appropriate, other information.
(c) Each State board shall—
(1) Develop assessment criteria no later than the beginning of the 1991-1992 school year; and
(2) Widely disseminate those criteria.
(d) Assessment criteria must include at least the following factors, but may include others:
(1) Integration of academic and vocational education.
(2) Sequential courses of study leading to both academic and occupational competencies.
(3) Increased student work skill attainment and job placement.
(4) Increased linkages between secondary and postsecondary educational institutions.
(5) Instruction and experience, to the extent practicable, in all aspects of an industry the students are preparing to enter.
(6) The ability of the eligible recipients to meet the needs of special populations with respect to vocational education.
(7) Raising the quality of vocational education programs in schools with a high concentration of poor and low-achieving students.
(8) The relevance of programs to the workplace and to the occupations for which students are to be trained, and the extent to which those programs reflect a realistic assessment of current and future labor market needs, including needs in areas of emerging technologies.
(9) The ability of the vocational curriculum, equipment, and instructional materials to meet the demands of the work force.
(10) Basic and higher order current and future workplace competencies that will reflect the hiring needs of employers.
(11) The capability of vocational education programs to meet the needs of individuals who are members of special populations.
(12) Other factors considered appropriate by the State board.
(e) The assessment must include an analysis of—
(1) The relative academic, occupational, training, and retraining needs of secondary, adult, and postsecondary students; and
(2) The capability of vocational education programs to provide vocational education students, to the extent practicable, with—
(i) Strong experience in, and understanding of, all aspects of the industry the students are preparing to enter (including planning, management, finances, technical and production skills, underlying principles of technology, labor and community issues,
(ii) Strong development and use of problem-solving skills and basic and advanced academic skills (including skills in the areas of mathematics, reading, writing, science, and social studies) in a technological setting.
(f)(1) Each State board shall complete the initial assessment required by paragraph (a) of this section before March 25, 1991, and, therefore, at least six months prior to the required submission of a new State plan to the Secretary.
(2) Each State board shall conduct an assessment under this section prior to the submission of each new State plan to the Secretary.
(a) If, one year after an eligible recipient has implemented its program improvement plan described in § 403.192, the State finds that the eligible recipient has not made sufficient progress in meeting the standards and measures developed as required by §§ 403.201 and 403.202, the State shall work jointly with the recipient and with teachers, parents, and students concerned with or affected by the program, to develop a joint plan for program improvement.
(b) Each joint plan required by paragraph (a) of this section must contain—
(1) A description of the technical assistance and program activities the State will provide to enhance the performance of the eligible recipient;
(2) A reasonable timetable to improve school performance under the plan;
(3) A description of vocational education strategies designed to improve the performance of the program as measured by the local evaluation; and
(4) If necessary, a description of strategies designed to improve supplementary services provided to individuals who are members of special populations.
(c) The State, in conjunction with the eligible recipient, shall annually review and revise the joint plan developed under paragraph (a) of this section and provide appropriate assistance until the recipient sustains fulfillment of State and local standards and measures developed under §§ 403.201 and 403.202 for more than one year.
The State board shall—
(a) Establish effective procedures, including an expedited appeals procedure, by which students who are members of special populations and their parents, teachers, and concerned area residents will be able to participate directly in State and local decisions that influence the character of programs under the Act affecting their interests; and
(b) Provide technical assistance and design procedures necessary to ensure that those individuals referred to in paragraph (a) of this section are given access to the information needed to use those procedures.
(a) A State that receives funds under the Act shall establish a State occupational information coordinating committee composed of representatives of the State board, the State employment security agency, the State economic development agency, the State job training coordinating council, and the agency administering the vocational rehabilitation program.
(b) With funds made available to it by the National Occupational Information Coordinating Committee, the State occupational information coordinating committee shall—
(1) Implement an occupational information system in the State that will
(2) Use the occupational information system to implement a career information delivery system.
A State shall forward to the National Center for Research in Vocational Education a copy of an abstract for each new research, curriculum development, or personnel development project it supports, and the final report on each project.
(a) The State board is subject to the prohibition against supplanting in § 403.196.
(b) The State board shall monitor each eligible recipient's compliance with the supplanting requirements in § 403.196.
Methods by which a local educational agency can demonstrate its compliance with the comparability requirements in 34 CFR 403.194(a) include the following:
(a) A district-wide salary schedule;
(b) A policy to ensure equivalence among secondary schools or sites in teachers, administrators, and auxiliary personnel; and
(c) A policy to ensure equivalency among secondary schools or sites in the provision of curriculum materials and instructional supplies.
(a) Comparing the average number of students per instructional staff in each secondary school or site served with Federal funds awarded under the State plan with the average number of students per instructional staff in secondary schools or sites not served with Federal funds awarded under the State plan. A served school is considered comparable if its average does not exceed 110 percent of the average of schools or sites in the local educational agency not served with Federal funds awarded under the State plan; or
(b) Comparing the average instructional staff salary expenditures per student in each secondary school or site served with Federal funds awarded under the State plan with the average instructional staff salary expenditure per student in schools or sites in the local educational agency not served with Federal funds awarded under the State plan. A served school is considered comparable if its average is at least 90 percent of the average of schools or sites not served with Federal funds awarded under the State plan.
20 U.S.C. 2394-2394e, unless otherwise noted.
If the annual appropriation for tech-prep education exceeds $50,000,000, the State-Administered Tech-Prep Education Program provides financial assistance for—
(a) Planning and developing four-year or six-year programs designed to provide a tech-prep education program leading to a two-year associate degree or certificate; and
(b) Planning and developing, in a systematic manner, strong, comprehensive links between secondary schools and postsecondary educational institutions.
A State board of vocational education (State board) in the fifty States, Puerto Rico, the District of Columbia, or the Virgin Islands is eligible for an allotment under this program.
(a) The Secretary makes allotments to State boards to provide funding for consortia described in § 406.30 for tech-prep education projects.
(b) A State board assists projects that must—
(1) Be carried out under an articulation agreement between the members of the consortium;
(2) Consist of the two years or four years of secondary school preceding graduation and two years of higher education, or an apprenticeship training program of at least two years following secondary instruction, with a common core of required proficiency in mathematics, science, communications, and technologies designed to lead to an associate degree or certificate in a specific career field;
(3) Include the development of tech-prep education program curricula appropriate to the needs of the consortium participants;
(4) Include in-service training for teachers that—
(i) Is designed to train teachers to implement tech-prep education program curricula effectively;
(ii) Provides for joint training for teachers from all participants in the consortium; and
(iii) May provide training on weekends, evenings, or during the summer in the form of sessions, institutes, or workshops;
(5) Include training activities for counselors designed to enable counselors to more effectively—
(i) Recruit students for tech-prep education programs;
(ii) Ensure that students successfully complete tech-prep education programs; and
(iii) Ensure that students are placed in appropriate employment;
(6) Provide equal access to the full range of tech-prep education programs to individuals who are members of special populations, including the development of tech-prep education program services appropriate to the needs of these individuals so that these individuals have an opportunity to enter tech-prep education that is equal to the opportunity afforded to the general student population; and
(7) Provide preparatory services that assist all populations to participate in tech-prep education programs.
(c) A project assisted under this part may also—
(1) Provide for the acquisition of tech-prep education program equipment; and
(2) Acquire, as part of the planning activities of the tech-prep education program, technical assistance from State or local entities that have successfully designed, established, and operated tech-prep education programs.
The following regulations apply to the State-Administered Tech-Prep Education Program:
(a) The regulations in this part 406.
(b) The regulations in 34 CFR part 400.
(a) The definitions in 34 CFR 400.4 apply to this part.
(b) The following definitions also apply to this part:
(1) Has the meaning provided in 34 CFR 400.4 for the term
(2) Includes tribally controlled community colleges.
(1) Proprietary institution of higher education;
(2) Postsecondary vocational institution;
(3) Department, division, or other administrative unit in a college or university that provides primarily or exclusively an accredited program of education in professional nursing and allied subjects leading to the degree of bachelor of nursing, or to be an equivalent degree, or to a graduate degree in nursing; and
(4) Department, division, or other administrative unit in a junior college, community college, college, or university that provides primarily or exclusively an accredited two-year program of education in professional nursing and allied subjects leading to an associate degree in nursing or an equivalent degree.
(1) Leads to an associate degree or two-year certificate;
(2) Provides technical preparation in at least one field of engineering technology, applied science, mechanical, industrial, or practical art or trade, or agriculture, health, or business;
(3) Builds student competence in mathematics, science, and communications (including through applied academics) through a sequential course of study; and
(4) Leads to placement in employment.
To receive a grant under this program, a State board shall submit an application to the Secretary at such time, in such manner, as the Secretary prescribes. The State board may submit an application along with the State plan submitted in accordance with 34 CFR 403.30. The application must include a description of—
(a) The requirements for State board approval of funding of a local tech-prep education project, including—
(1) Whether the State board intends to make awards on a competitive basis or on the basis of a formula; and
(2) If a formula is to be used, a description of that formula;
(b) How the State board will perform the following:
(1) Approve applications based on their potential to create an effective tech-prep education program as described in § 406.3(b).
(2) Give special consideration to applicants that—
(i) Provide for effective employment placement activities or transfer of students to four-year baccalaureate degree programs;
(ii) Are developed in consultation with business, industry, labor unions, and institutions of higher education that award baccalaureate degrees; and
(iii) Address effectively the issues of dropout prevention and re-entry and the needs of minority youth of limited English proficiency, youth with disabilities, and disadvantaged youth;
(3) Ensure an equitable distribution of assistance between urban and rural consortium participants;
(c) How the State board will ensure that local recipients meet the requirements of this program; and
(d) How activities under this program will be coordinated with other tech-prep education programs, services, and activities provided under the State plan.
The Secretary determines the amount of each State's allotment according to a formula in section 101(a)(2) of the Act.
(a)(1) If the Secretary determines that any amount of a State's allotment under § 406.20 will not be required for any fiscal year for carrying out the program under this part, the Secretary reallots those funds to one or more States that demonstrate a current need for additional funds and the ability to use them promptly and effectively upon reallotment.
(2) The Secretary announces in the
(b)(1) No funds reallotted under paragraph (a) of this section may be used for any purpose other than the purposes for which they were appropriated.
(2) Any amount reallotted to a State under paragraph (a) of this section remains available for obligation during the succeeding fiscal year and is deemed to be part of the State's allotment for the fiscal year in which the reallotted funds are obligated.
(a) A State board shall provide subgrants or contracts to consortia between—
(1) A local educational agency, intermediate educational agency, area vocational education school serving secondary school students, or secondary school funded by the Bureau of Indian Affairs; and
(2) A nonprofit institution of higher education that—
(i) Is qualified as an institution of higher education as defined in § 406.5, including institutions receiving assistance under the Tribally Controlled Community College Assistance Act of 1978 (25 U.S.C. 1801
(ii) Is not prohibited from receiving assistance under part B of the Higher Education Act of 1965 pursuant to the provisions of section 435(a)(3) of that Act; and
(iii) Offers a two-year associate degree program, a two-year certificate program, or a two-year apprenticeship training program that follows secondary instruction; or
(3) A proprietary institution of higher education that—
(i) Is qualified as an institution of higher education as defined in § 406.5;
(ii) Is not subject to a default management plan required by the Secretary; and
(iii) Offers a two-year associate degree program.
(b) A consortia must include at least one entity from paragraph (a)(1) of this section and at least one entity from either paragraph (a)(2) or (a)(3) of this section, and may include more than one entity from each group.
(a) A State board carries out the program by—
(1) Providing State administration of its grant; and
(2) Awarding subgrants or contracts to eligible consortia on a competitive basis or on the basis of a formula determined by the State board.
(b) A State board may use funds reserved under 34 CFR 403.180(b)(3) to provide support for the State-administered Tech-Prep Education Program.
(c) A State board may use no more than the amount of funds from its award under this part that is necessary and reasonable for—
(1) The proper and efficient administration of this program; and
(2) Technical assistance to promote or enhance the quality and effectiveness of the State's tech-prep education program.
(a) Each consortium that desires to receive an award shall submit an application to the State board.
(b) The application must be submitted at the time and contain the information prescribed by the State board, and must contain—
(1) An articulation agreement between the participants in the consortium; and
(2) A three-year plan for the development and implementation of activities under this part.
The State board shall, in conjunction with recipients of subgrants and contracts, with respect to assistance received under this part, submit to the Secretary reports as may be required by the Secretary to ensure that grantees are complying with the requirements of this part.
20 U.S.C. 2397-2397h, unless otherwise noted.
The Tribally Controlled Postsecondary Vocational Institutions Program provides grants for the operation and improvement of tribally controlled postsecondary vocational institutions to ensure continued and expanded educational opportunities for Indian students, and to allow for the improvement and expansion of the physical resources of those institutions.
A tribally controlled postsecondary vocational institution is eligible for assistance under this part if it—
(a) Is governed by a board of directors or trustees, a majority of whom are Indians;
(b) Demonstrates adherence to stated goals, a philosophy, or a plan of operation that fosters individual Indian economic and self-sufficiency opportunity, including programs that are appropriate to stated tribal goals of developing individual entrepreneurships and self-sustaining economic infrastructures on reservations;
(c) Has been in operation for at least three years;
(d) Holds accreditation with or is a candidate for accreditation by a nationally recognized accrediting authority for postsecondary vocational education; and
(e) Enrolls the full-time equivalency of not fewer than 100 students, of whom a majority are Indians.
The Secretary provides grants for basic support for the education and training of Indian students, including—
(a) Training costs;
(b) Educational costs;
(c) Equipment costs;
(d) Administrative costs; and
(e) Costs of operation and maintenance of the institution.
The following regulations apply to the Tribally Controlled Postsecondary Vocational Institutions Program:
(a) The regulations in this part 410.
(b) The regulations in 34 CFR part 400.
(a) The definitions in 34 CFR 400.4 apply to this part, except for the definition of the term
(b) The following definitions also apply to this part:
(1) The registrations of Indian students as in effect on October 1 of each year.
(2) Credits or clock hours toward a certificate earned in classes offered during a summer term must be counted toward the computation of the Indian student count in the succeeding fall term.
(3) Credits or clock hours toward a certificate earned in classes during a summer term must be counted toward the computation of the Indian student count if the institution at which the student is in attendance has established criteria for the admission of the student on the basis of the student's ability to benefit from the education or training offered. The institution is presumed to have established those criteria if the admission procedures for those studies include counseling or testing that measures the student's aptitude to successfully complete the course in which the student has enrolled. Credit earned by the student for purposes of obtaining a high school degree or its equivalent may not be counted toward the computation of the Indian student count.
(4) Indian students earning credits in any continuing education program of a tribally controlled vocational institution must be included in determining the sum of all credit or clock hours.
(5) Credits or clock hours earned in a continuing education program must be converted to the basis that is in accordance with the institution's system for providing credit for participation in those programs.
(a) An application for a grant under the Tribally Controlled Postsecondary Vocational Institutions Program must include the following:
(1) Documentation showing that the institution is eligible according to the requirements in § 410.2.
(2) A description of the fiscal control and fund accounting procedures to be used for all funds received under this program that will allow the Secretary to monitor expenditures and the Education Department Inspector General, the U.S. Comptroller General, or an independent non-Federal auditor to audit the institution's programs.
(3) The institution's operating expenses for the preceding fiscal year, including allowable expenses listed in § 410.30.
(4) The institution's Indian student count.
(b) An application for an institutional support grant must also contain a comprehensive development plan addressing the following:
(1) The institutional mission statement, i.e., a broad statement of purpose, that identifies the institution's distinguishing characteristics, including the characteristics of the students the institution serves and plans to serve and the programs of study it offers and proposes to offer.
(2) Data for the past three academic years reflecting the number and required qualifications of the teaching and administrative staff, the number of students enrolled, attendance rates, dropout rates, graduation rates, rate of job placement or college enrollment after graduation, and the most significant scholastic problems affecting the student population.
(3) A description of how the institution is responsive to the current and projected labor market needs in its geographic area, including the institution's plans for placement of students.
(4) Assumptions concerning the institutional environment, the potential number of students to be served, enrollment trends, and economic factors that could affect the institution.
(5) Major problems or deficiencies that inhibit the institution from realizing its mission.
(6) Long-range and short-range goals that will chart the growth and development of the institution and address the problems identified under paragraph (b)(5) of this section.
(7) Measurable objectives related to reaching each goal.
(8) Time-frames for achieving the goals and objectives described in paragraphs (b)(6) and (7) of this section.
(9) Priorities for implementing improvements concerning instructional and student support, capital expenditures, equipment, and other priority areas.
(10) Major resource requirements necessary to achieve the institution's goals and objectives, including personnel, finances, equipment, and facilities.
(11) A detailed budget identifying the costs to be paid with a grant under this program and resources available from other Federal, State, and local sources that will be used to achieve the institution's goals and objectives. Budget and cost information must be sufficiently detailed to enable the Secretary to determine the amount of payments pursuant to section 386(b)(2) of the Act. The statement must include information on allowable expenses listed in § 410.30.
(12) Strategies and resources for objectively evaluating the institution's progress towards, and success in, achieving its goals and objectives.
(a) The Secretary evaluates an application on the basis of the criteria in § 410.21.
(b) The Secretary may award up to 100 points, including a reserved 15 points to be distributed in accordance with paragraph (d) of this section, based on the criteria in § 410.21.
(c) Subject to paragraph (d) of this section, the maximum possible score for each criterion in § 410.21 is indicated in parentheses after the heading for each criterion.
(d) For each competition as announced through a notice published in the
The Secretary uses the following criteria to evaluate an application for an institutional support grant:
(a)
(1) Realistic and defined in terms of measurable results; and
(2) Directly related to the problems to be solved.
(b)
(c)
(1) For each major activity funded under this program, is comprehensive and likely to be effective, taking into account the applicant's past performance and the data for the past three academic years reflecting the number and required qualifications of the teaching and administrative staff, the number of students enrolled, attendance rates, dropout rates, graduation rates, rate of job placement or college enrollment after graduation, and the most significant scholastic problems affecting the student population;
(2) Includes a realistic timetable for each such activity; and
(3) Includes a staff management plan likely to ensure effective administration of the project activities.
(d)
(1) The budget is adequate to support the proposed activities to be funded under this program, including capital expenditures and acquisition of equipment, if applicable;
(2) Costs are necessary and reasonable in relation to similar activities the institution carried out in previous years; and
(3) The budget narrative justifies the expenditures.
(e)
(1) The plan identifies, at a minimum, types of data to be collected, expected outcomes, and how those outcomes will be measured;
(2) The methods of evaluation are appropriate and, to the extent possible, are objective and produce data that are quantifiable; and
(3) The methods of evaluation provide periodic data that can be used for ongoing program improvement.
(a) After evaluating applications according to the criteria in § 410.21 and consulting, to the extent practicable, with boards of trustees and the tribal governments chartering the institutions being considered, the Secretary determines whether the most highly rated applications are equitably distributed among Indian tribes.
(b) The Secretary may select other applications for funding if doing so would improve the distribution of projects among Indian tribes.
(c) In addition to the criteria in § 410.21, the Secretary considers whether funding a particular applicant duplicates an effort already being made.
(a) The Secretary selects at least two eligible applicants for funding.
(b) If only one or two applicants are eligible, the Secretary selects each eligible applicant. The amount of each grant is determined by the quality of the application, based on the selection criteria in § 410.22, and the respective needs of the applicants.
(c) If there are more than two eligible applicants, the Secretary ranks each application using the selection criteria in § 410.22. The Secretary funds two or more applicants. The number of grants made and the amount of each grant is determined by taking into account the quality of the applications and the respective needs of the applicants.
(d) For fiscal years subsequent to the first year of funding, the Secretary follows the procedure in paragraphs (a) through (c) of this section, except that if appropriations for that fiscal year are not sufficient to pay in full the total amount that approved applicants are eligible to receive, the Secretary
If funds remain after providing grants to all eligible institutions, the Secretary makes awards as follows:
(a) The Secretary allocates funds to institutions receiving their first grant under this part in an amount equal to the training equipment costs necessary to implement training programs.
(b) If funds remain after the Secretary makes awards under paragraph (a) of this section, the Secretary reviews training equipment needs at each institution receiving assistance under this part at the end of the five-year period beginning on the first day of the first year for which the institution received a grant under this part, and provides allocations for other training equipment needs if it is demonstrated by the institution that its training equipment has become obsolete for its purposes, or that the development of other training programs is appropriate.
An institutional support grant may only be used to pay expenses associated with the following:
(a) The maintenance and operation of the program, including—
(1) Development costs;
(2) Costs of basic and special instruction, including special programs for individuals with disabilities and academic instruction;
(3) Materials;
(4) Student costs;
(5) Administrative expenses;
(6) Boarding costs;
(7) Transportation;
(8) Student services;
(9) Day care and family support programs for students and their families, including contributions to the costs of education for dependents; and
(10) Training equipment costs necessary to implement training programs.
(b) Capital expenditures, including operations and maintenance, minor improvements and repair, and physical plant maintenance costs.
(c) Costs associated with repair, upkeep, replacement, and upgrading of instructional equipment.
(a) Except as specifically provided in the Act, eligibility for assistance under this part may not preclude any tribally controlled postsecondary vocational institution from receiving Federal financial assistance under any program authorized under the Higher Education Act of 1965 (20 U.S.C. 1001
(b) No tribally controlled postsecondary vocational institution for which an Indian tribe has designated a portion of the funds appropriated for the tribe from funds appropriated under the Act of November 2, 1921 (25 U.S.C. 13) may be denied a contract for that portion under the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450
20 U.S.C. 2401 and 2402, unless otherwise noted.
The Vocational Education Research Program is designed to—
(a) Improve access to vocational educational programs for individuals with disabilities, individuals who are disadvantaged, men and women who are entering nontraditional occupations, adults who are in need of retraining, single parents, displaced homemakers, single pregnant women, individuals with limited English proficiency, and individuals who are incarcerated in correctional institutions;
(b) Support research and development activities that make the United States more competitive in the world economy by developing more fully the academic and occupational skills of all segments of the population by concentrating resources on improving educational programs leading to academic and occupational skill competencies needed to work in a technologically advanced society;
(c) Improve the competitive process by which research projects are awarded;
(d) Encourage the dissemination of findings of research projects assisted under the Act to all States; and
(e) Support research activities that are readily applicable to the vocational education setting and are of practical application to vocational education administrators, counselors, instructors, and others involved in vocational education.
(a) Any individual or public or private agency, organization, or institution may apply for an award under this part.
(b) Any individual researcher, community college, State advisory council, or State or local educator may submit an unsolicited research application.
The Secretary may directly, or through grants, cooperative agreements, or contracts, conduct applied research on aspects of vocational education that are specially related to the Act, including the following:
(a) Applied research on—
(1) Effective methods for providing quality vocational education to individuals with disabilities, disadvantaged individuals, men and women in nontraditional fields, adults, single parents, displaced homemakers, single pregnant women, individuals with limited English proficiency, and individuals who are incarcerated in correctional institutions;
(2) The development and implementation of performance standards and measures that fit within the needs of State boards of vocational education or eligible recipients as defined in 34 CFR 400.4 in carrying out the provisions of the Act and on the relationship of those standards and measures to the data system established under section 421 of the Act. Research may include an evaluation of existing performance standards and measures and dissemination of that information to State boards of vocational education and eligible recipients;
(3) Strategies for coordinating local, State, and Federal vocational education, employment training, and economic development programs to maximize their efficacy and for improving worker training and retraining;
(4) The constructive involvement of the private sector in public vocational education;
(5) Successful methods of reinforcing and enhancing basic and more advanced academic and problem-solving skills in vocational settings;
(6) Successful methods for providing students, to the maximum extent practicable, with experience in and understanding of all aspects of the industry those students are preparing to enter; and
(7) The development of effective methods for providing quality vocational education to individuals with limited English proficiency, including research related to bilingual vocational training.
(b) An evaluation of the use of performance standards and measures under the Act and the effect of those standards and measures on the participation of students in vocational education programs and on the outcomes of students in those programs, especially students who are members of special populations as defined in 34 CFR 400.4.
The following regulations apply to the Vocational Education Research Program:
(a) The regulations in this part 411.
(b) The regulations in 34 CFR part 400.
The definitions in 34 CFR 400.4 apply to this part.
(a) The Secretary evaluates an application for a grant or cooperative agreement on the basis of the criteria in § 411.21.
(b) The Secretary may award up to 100 points, including a reserved 15 points to be distributed in accordance with paragraph (d) of the section, based on the criteria in § 411.21.
(c) Subject to paragraph (d) of this section, the maximum possible score for each criterion is indicated in parentheses after the heading for each criterion.
(d) For each competition as announced through a notice published in the
(e) The Secretary awards five points to applications submitted by public or private postsecondary institutions.
The Secretary uses the following criteria to evaluate an application:
(a)
(1) The need for the project in relation to any program priority announced in the
(2) The likelihood that the project will make an important contribution to vocational education.
(b)
(1) High quality in the design of the project;
(2) An effective plan of management that ensures proper and efficient administration of the project;
(3) A clear description of how the objectives of the project relate to the purposes of the program;
(4) The quality of the applicant's plans to use its resources and personnel to achieve each objective; and
(5) How the applicant will ensure that project participants who are otherwise eligible to participate are selected without regard to race, color, national origin, gender, age, or disability.
(c)
(i) The qualifications of the project director;
(ii) The qualifications of each of the other key personnel to be used in the project;
(iii) The appropriateness of the time that each one of the key personnel, including the project director, will commit to the project; and
(iv) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected for employment without regard to race, color, national origin, gender, age, or disability.
(2) To determine personnel qualifications under paragraphs (c)(1)(i) and (ii) of this section, the Secretary considers—
(i) Experience and training in fields related to the objectives of the project;
(ii) Experience and training in project management; and
(iii) Any other qualifications that pertain to the quality of the project.
(d)
(1) The budget for the project is adequate to support the project activities; and
(2) Costs are reasonable and necessary in relation to the objectives of the project.
(e)
(1) Are clearly explained and appropriate to the project;
(2) To the extent possible, are objective and produce data that are quantifiable;
(3) Includes activities during the formative stages of the project to help guide and improve the project, as well as a summative evaluation that includes recommendations for replicating project activities and results;
(4) If appropriate, identifies expected outcomes of the project participants and how those outcomes will be measured;
(5) If appropriate, will provide a comparison between intended and observed results, and lead to the demonstration of a clear link between the observed results and the specific treatment of project participants; and
(6) To the extent possible, include a third party evaluation.
(f)
(g)
(1) The extent to which the project is designed to yield outcomes that can be readily disseminated;
(2) A clear description of the project outcomes; and
(3) A detailed description of how information and materials will be disseminated, including—
(i) Provisions for publicizing the project at the local, State, and national levels by conducting or delivering presentations at conferences, workshops, and other professional meetings and by preparing materials for journals articles, newsletters, and brochures;
(ii) Provisions for demonstrating the methods and techniques used by the project to others interested in replicating these methods and techniques; and
(iii) Provisions for assisting others to adopt and successfully implement the project or methods and techniques used by the project.
After evaluating the applications according to the criteria in § 411.21 the Secretary may select other than the most highly rated applications for funding if doing so would—
(a) Improve the geographical distribution of projects funded under this program; or
(b) Contribute to the funding of a variety of approaches for carrying out the activities under this part.
(a) At any time during a fiscal year, the Secretary may accept and consider
(b) Notwithstanding the provisions of 34 CFR 75.100, the Secretary may fund an unsolicited application without publishing an application notice in the
(c) The Secretary may select an unsolicited application for funding in accordance with the procedures in §§ 411.20(e) and 411.24.
(d) The Secretary assigns the 15 points reserved under § 411.20(b) as follows:
(1) Ten points to the selection criterion in § 411.21(a)—national need.
(2) Five points to the selection criterion in § 411.21(b)—plan of operation.
(a) After evaluating an unsolicited research application on the basis of the criteria in § 411.21, the Secretary compares that application to other unsolicited research applications the Secretary has received.
(b) The Secretary may fund an unsolicited research application at any time during the fiscal year.
20 U.S.C. 2402(c), unless otherwise noted.
The National Network for Curriculum Coordination in Vocational and Technical Education (Network) is a system of six curriculum coordination centers that disseminate information resulting from research and development activities carried out under the Act, in order to ensure broad access at the State and local levels to the information being disseminated.
State and local educational agencies, postsecondary educational institutions, and other public and private agencies, organizations, and institutions are eligible for an award under this program.
(a) The Secretary provides grants, cooperative agreements, or contracts to six regional curriculum coordination centers (CCCs).
(b) Each CCC must—(1) Provide for national dissemination of information on effective vocational and technical education programs and materials, with particular attention to regional programs;
(2) Be accessible by electronic means;
(3) Provide leadership and technical assistance in the design, development, and dissemination of curricula for vocational education;
(4) Coordinate the sharing of information among the States with respect to vocational and technical education curricula;
(5) Reduce duplication of effort in State activities for the development of vocational and technical education curricula; and
(6) Promote the use of research findings with respect to vocational education curricula.
(c) The six regional CCCs assisted with funds under this program must serve States according to the Department of Education's regional alignment as follows:
(1) The Northeast Curriculum Coordination Center serves Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Puerto Rico, Rhode Island, Vermont, and the Virgin Islands.
(2) The Southeast Curriculum Coordination Center serves Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee.
(3) The East Central Curriculum Coordination Center serves Delaware, the District of Columbia, Indiana, Illinois, Maryland, Michigan, Minnesota, Ohio, Pennsylvania, Virginia, West Virginia, and Wisconsin.
(4) The Midwest Curriculum Coordination Center serves Arkansas, Iowa, Kansas, Louisiana, Missouri, Nebraska, New Mexico, Oklahoma, and Texas.
(5) The Northwest Curriculum Coordination Center serves Alaska, Colorado, Idaho, Montana, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming.
(6) The Western Curriculum Coordination Center serves American Samoa, Arizona, California, Guam, Hawaii, Nevada, the Northern Mariana Islands, and Palau until the Compact of Free Association with Palau takes effect.
(a) The National Network of Directors Council (Council) enhances the effectiveness of the Network by—
(1) Planning for inter-center coordination, dissemination, and diffusion activities;
(2) Providing leadership to ensure cohesiveness for overall Network functions;
(3) Promoting the adoption and adaptation of curriculum materials;
(4) Maintaining liaison with dissemination systems described in § 412.32;
(5) Convening at least twice a year; and
(6) Planning for and participating in an annual meeting of CCCs that includes activities such as displays of current curriculum materials from each CCC, inservice training sessions, and hands-on experience with new technologies in vocational and technical education. This meeting must be held in a different region each year.
(b) The Council is composed of the six CCC directors and a liaison from the Department. One of the CCC directors serves as chair for the Council and has responsibilities for submitting minutes of Council meetings to the Secretary.
The following regulations apply to the National Network for Curriculum Coordination in Vocational and Technical Education:
(a) The regulations in this part 412.
(b) The regulations in 34 CFR part 400.
The definitions in 34 CFR 400.4 apply to this part.
(a) The Secretary evaluates an application for a grant or cooperative agreement on the basis of the criteria in § 412.21.
(b) The Secretary may award up to 100 points, including 15 points to be distributed in accordance with paragraph (d) of this section, based on the criteria in § 412.21.
(c) Subject to paragraph (d) of this section, the maximum possible score for each criterion is indicated in parentheses after the heading for each criterion.
(d) For each competition as announced through a notice published in the
The Secretary uses the following criteria to evaluate an application:
(a)
(1) Demonstrates an understanding of the leadership responsibilities associated with serving as a resource center and facilitator for States in a region, including the region's need for inservice training, holding regional meetings, providing technical assistance, coordinating with State directors of vocational education, maintaining a lending library, and disseminating information regularly;
(2) Proposes adequate mechanisms and procedures for reporting the results of curriculum networking services and activities of the 50 States, District of Columbia, Puerto Rico, and the Outlying Areas;
(3) Demonstrates the capacity to disseminate information on effective vocational education materials, including curriculum materials;
(4) Demonstrates an understanding of the operation of the Vocational Education Curriculum Materials and ADVOCNET Systems and the need for establishing a Tech-Prep education clearinghouse; and
(5) Demonstrates the capacity to undertake the responsibilities associated with participation as a member of the Network Directors Council described in § 412.4.
(b)
(1) The quality of the design of the project;
(2) The extent to which the management plan ensures proper and efficient administration of the project;
(3) How well the objectives of the project relate to the purpose of the program;
(4) The quality of the applicant's plan to use its resources and personnel to achieve each objective; and
(5) How the applicant will ensure that project participants who are otherwise eligible to participate are selected without regard to race, color, national origin, gender, age, or disability.
(c)
(i) The qualifications of the project director;
(ii) The qualifications of each of the other key personnel to be used in the project;
(iii) The appropriateness of the time that each person referred to in paragraphs (c)(1) (i) and (ii) of this section will commit to the project; and
(iv) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected for employment without regard to race, color, national origin, gender, age, or disability.
(2) To determine the personnel qualifications under paragraphs (c)(1)(i) and (ii) of this section, the Secretary considers—
(i) The experience and training of key personnel in project management and in the fields related to the objectives of the project; and
(ii) Any other qualifications of key personnel that pertain to the quality of the project.
(d)
(1) Has experience with vocational education curriculum and dissemination;
(2) Will initiate and maintain liaison functions with regional States; and
(3) Will provide adequate facilities, equipment, and supplies.
(e)
(1) The budget is cost effective and adequate to support the project activities; and
(2) The budget contains costs that are reasonable in relation to the objectives of the project.
(f)
(1) Is clearly explained and is appropriate to the project; and
(2) Identifies expected outcomes of the services provided and how those services will be measured.
In carrying out the activities described in § 412.3, each CCC must perform the following activities:
(a) Assist States in the development, adaptation, adoption, dissemination, and use of curriculum materials and services and other information resulting from research and development activities carried out under the Act, including performing these activities during at least two regional meetings involving States served by the CCC. One of these regional meetings must be conducted jointly with the other five CCCs and their regional States at the meeting described in § 412.4(a)(6).
(b) Coordinate with other curriculum coordination centers funded under this part.
(c) Coordinate with the State salaried State liaison representative (SLR), who is appointed by the State director of vocational education. The SLR has primary responsibilities for liaison activities within the States, including—
(1) Obtaining new curriculum and research and development materials for Network sharing;
(2) Informing localities and State agencies of Network services;
(3) Disseminating CCC related materials;
(4) Arranging for intrastate and interstate development and dissemination activities;
(5) Arranging for technical assistance and inservice training workshops;
(6) Participating in regional CCC meetings; and
(7) Fostering adoption and adaptations of materials available through the CCC.
(d) Maintain a lending library with a collection of vocational education curriculum, research, and development materials for use by the States served by the CCC.
(e) Each CCC must participate in the Council activities described in § 412.4.
In carrying out its activities, each CCC must use existing dissemination systems, including the National Diffusion Network and the National Center or Centers for Research in Vocational Education, in order to ensure broad access at the State and local levels to the information being disseminated.
20 U.S.C. 2404, unless otherwise noted.
The Secretary supports the establishment of one or two National Centers for Research in Vocational Education (National Center) in the areas of—
(a) Applied research and development; and
(b) Dissemination and training.
An institution of higher education or consortium of institutions of higher education may apply to be a National Center under this part.
See 34 CFR 75.127 through 75.129, Group Applications.
The Secretary provides a grant or cooperative agreement to a National Center or Centers that are designed to perform either one or both of the following activities:
(a)
(i) Longitudinal studies that extend over a period of years;
(ii) Supplementary and short-term activities; and
(iii) Upon negotiation with the center, and if funds are provided pursuant to section 404(d) of the Act, such other topics as the Secretary may designate.
(2) The National Center shall conduct applied research and development activities that include examination of the following:
(i) Economic changes that affect the skills that employers seek and entrepreneurs need.
(ii) Integration of academic and vocational education.
(iii) Efficient and effective practices for addressing the needs of special populations.
(iv) Efficient and effective methods for delivering vocational education.
(v) Articulation of school and college instruction with high quality work experience.
(vi) Recruitment, education, and enhancement of vocational teachers and other professionals in the field.
(vii) Accountability processes in vocational education, including identification and evaluation of the use of appropriate performance standards for student, program, and State-level outcomes.
(viii) Effective practices that educate students in all aspects of the industry the students are preparing to enter.
(ix) Effective methods for identifying and inculcating literacy and other communication skills essential for effective job preparation and job performance.
(x) Identification of strategic, high priority occupational skills and skills formation approaches needed to maintain the competitiveness of the United States workforce, sustain high-wage, high-technology jobs, and address national priorities such as technical jobs
(xi) Identification of practices and strategies that address entrepreneurial development for minority-owned enterprises.
(3) The applied research and development activities must include—
(i) An emphasis on the recruitment, education, and enhancement of minority and female vocational teachers and professionals; and
(ii) Activities that aid in the development of minorities and women for leadership roles in vocational education.
(b)
(i) The broad dissemination of the results of the research and development conducted by the National Center;
(ii) The development and utilization of a national level dissemination network including functions such as clearinghouses, databases, and telecommunications;
(iii) Planning, developing, and conducting training activities; and
(iv) Upon negotiation with the Center and if funds are provided pursuant to section 404(d) of the Act, such other topics as the Secretary may designate.
(2) The National Center shall conduct dissemination and training activities that include the following:
(i) Teacher and administrator training and leadership development.
(ii) Technical assistance to ensure that programs serving special populations are effective in delivering well-integrated and appropriately articulated vocational and academic offerings for secondary, postsecondary, and adult students.
(iii) Needs assessment, design, and implementation of new and revised programs with related curriculum materials to facilitate vocational-academic integration.
(iv) Evaluation and follow-through to maintain and extend quality programs.
(v) Assistance in technology transfer and articulation of program offerings from advanced technology centers to minority enterprises.
(vi) Assistance to programs and States on the use of accountability indicators, including appropriate and innovative performance standards.
(vii) Delivery of information and services using advanced technology, if appropriate, to increase the effectiveness and efficiency of knowledge transfer.
(viii) Development of processes for synthesis of research, in cooperation with a broad array of users, including vocational and non-vocational educators, employers and labor organizations.
(ix) Dissemination of exemplary curriculum and instructional materials, and development and publication of curriculum materials (in conjunction with vocational and nonvocational constituency groups, if appropriate).
(x) Technical assistance in recruiting, hiring, and advancing minorities in vocational education.
(3) The training and leadership development activities must include an emphasis on—
(i) Training minority and female teachers; and
(ii) Programs and activities that aid in the development of minorities and women for leadership roles in vocational education.
(4) Advanced technology may include audio-video cassettes, electronic networking, satellite-assisted programming, computer-based conferencing, and interactive video.
(a) The Secretary designates a National Center or Centers once every five years.
(b) In designating the National Center or Centers for Research in Vocational Education, the Secretary may support—
(1) One National Center that conducts both research and development activities and dissemination and training activities; or
(2) Two National Centers: one that conducts research and development activities and one that conducts dissemination and training activities.
The following regulations apply to the National Center or Centers:
(a) The regulations in this part 413.
(b) The regulations in 34 CFR part 400.
The definitions in 34 CFR 400.4 apply to this part, except that the term “institution of higher education” has the same meaning as provided in 34 CFR 403.117(b).
(a) The Secretary evaluates an application on the basis of the criteria in §§ 413.21 and 413.22.
(b) The Secretary may award up to 100 points to each set of criteria in §§ 413.21 and 413.22, including a reserved 10 points for each set of criteria to be distributed in accordance with paragraph (d) of this section.
(c) Subject to paragraph (d) of this section, the maximum possible score for each criterion is indicated in parentheses after the heading for each criterion.
(d) For each competition as announced through a notice published in the
(e) The Secretary may hold two separate competitions, with the same closing date, for the National Center or Centers. One competition will be held for research and development activities and the second competition will be held for dissemination and training activities. An institution of higher education or consortium of higher education institutions may submit a research and development application; a dissemination and training application; or both as separate applications under separate covers.
(f) The Secretary evaluates applications for the research and development center and the dissemination and training center independently against the criteria in §§ 413.21 and 413.22 whether an institution or consortium of institutions is competing for either or both sets of activities.
(g) In accordance with section 404(a)(5) of the Act, the Secretary will give preference in grant selection to institutions or consortia of institutions that demonstrate the ability to carry out both the research and development and the dissemination and training activities effectively, either directly or by contract.
(h) An institution or consortium of institutions that has submitted two applications and applied for a single grant for the purpose of carrying out both activities and that has earned 80 points or higher on each of its two applications, will be deemed by the Secretary to have demonstrated the ability to carry out both activities effectively.
(i) The Secretary will award a single grant to an institution or consortium of institutions that has both—
(1) Demonstrated the ability to carry out both program activities effectively, in accordance with paragraph (h) of this section; and
(2) Earned the highest combined score among those institutions or consortia of institutions that have demonstrated the ability to carry out both activities effectively.
(j) If no institution or consortium of institutions is selected for a single grant award, the institution or consortia of institutions ranking highest in each of the two competitions will each receive a grant award.
The Secretary uses the following selection criteria in evaluating each research and development application:
(a)
(b)
(1) The applicant's plan for managing the National Center;
(2) The procedures the applicant will use to implement the National Center particularly with regard to the public or private nonprofit institution of higher education with which it is associated and, in the case of a consortium, with the other member institutions of the consortium;
(3) The applicant's plan for managing the National Center's activities and personnel, including—
(i) Quality control procedures for its activities;
(ii) Procedures for assuring compliance with timelines;
(iii) Coordination procedures for communicating among staff, subcontractors, members of the consortium, if any, and the Department of Education;
(iv) Procedures for ensuring that adequate progress is being made toward achieving the goals of the grantee by subcontractors, and members of a consortium; and
(v) Procedures for ensuring that adequate budget, accounting, and recordkeeping procedures will be used;
(4) The quality of the applicant's detailed plans for year one of the National Center, including—
(i) Methodology and plan of operation;
(ii) Tasks and timelines;
(iii) Deliverables; and
(iv) Dissemination plans for each project; and
(5) The quality of the applicant's general plans for developing appropriate, coherent, and effective vocational education research and development activities, or dissemination and training activities, or both, for years two through five.
(c)
(1) The extent to which the Director of the National Center has—
(i) Appropriate professional qualifications, relevant project management experience, and administrative skills;
(ii) A commitment to work full-time at the National Center;
(iii) A clear commitment to the goals of the project; and
(iv) Sufficient authority to effectively manage the activities of the National Center;
(2) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected for employment without regard to race, color, national origin, gender, age, or disability; and
(3) The extent to which other key personnel to be used for the National Center—
(i) Have experience and training in project management and in fields related to the proposed activities they will be carrying out; and
(ii) Will commit sufficient time to the project.
(d)
(1) The applicant's experience in conducting applied research and development activities, dissemination and training activities, or both, in the field of vocational education of the type described in § 413.3;
(2) The applicant's capacity for conducting applied research and development activities, dissemination and training activities, or both, in the field of vocational education of the type described in § 413.3; and
(3) How the activities of the National Center will contribute to the advancement of relevant theory and practice in vocational education.
(e)
(1) The Center has an adequate budget that is cost effective;
(2) The budget is adequate to support the Center's activities; and
(3) Costs are reasonable in relation to the objectives of the Center.
(f)
The Secretary uses the following selection criteria in evaluating each dissemination and training application:
(a)
(b) The selection criteria and points in § 413.21 (b), (c), (d), (e), and (f).
(a) A National Center that performs both research and development activities and dissemination and training activities shall use at least two-thirds of its award for applied research and development.
(b) Not more than 10 percent of each year's budget for a National Center may be used to respond to field-initiated needs unanticipated prior to the annual funding period and that are in the mission of the National Center, but not part of the scope of work of the grant or cooperative agreement.
A National Center must have a full-time director who is appointed by the institution serving as the grantee.
If the Secretary designates two National Centers, the two centers must coordinate their activities.
(a) The National Center conducting research and development activities shall annually prepare a study on the research conducted on approaches that lead to effective articulation for the education-to-work transition, including tech-prep programs, cooperative education or other work-based programs, such as innovative apprenticeship or mentoring approaches.
(b) The National Center conducting dissemination and training activities shall annually prepare a study of its dissemination and training activities.
(c) Annual studies described in paragraphs (a) and (b) of this section must be submitted to the Secretary of Education, the Secretary of Labor, the Secretary of Health and Human Services, the Committee on Labor and Human Resources of the Senate, and the Committee on Education and Labor of the House of Representatives.
During the fifth year of the award cycle, the National Center or Centers shall develop and remain prepared to implement a contingency plan for completing all substantive work by the end of the eleventh month of that year and transferring all projects, services, and activities to a successor during the twelfth month of that year.
20 U.S.C. 2413, unless otherwise noted.
The Demonstration Centers for the Training of Dislocated Workers Program provides financial assistance for establishing one or more demonstration centers for the retraining of dislocated workers.
A private nonprofit organization that is eligible to receive funding under title III of the Job Training Partnership Act (29 U.S.C. 1651
(a) The Secretary provides grants or cooperative agreements for one or more centers that demonstrate the retraining of dislocated workers.
(b) Each center funded by the Secretary must be designed and operated to provide for the use of appropriate existing Federal, State, and local programs and resources.
(c) Each center may use funds to provide for—
(1) The recruitment of unemployed workers;
(2) Vocational evaluation;
(3) Assessment and counseling services;
(4) Vocational and technical training;
(5) Support services; or
(6) Job placement assistance.
The following regulations apply to the Demonstration Centers for the Training of Dislocated Workers Program:
(a) The regulations in this part 415.
(b) The regulations in 34 CFR part 400.
The definitions in 34 CFR 400.4 apply to this part.
(a) The Secretary evaluates an application on the basis of the criteria in § 415.21.
(b) The Secretary may award up to 100 points, including a reserved 15 points to be distributed in accordance with paragraph (d) of this section, based on the criteria in § 415.21.
(c) Subject to paragraph (d) of this section, the maximum possible score
(d) For each competition, as announced in a notice published in the
The Secretary uses the following criteria to evaluate an application:
(a)
(1) Be located in a service area with a high concentration of dislocated workers, as supported by specific evidence of the need for the proposed demonstration center;
(2) Provide vocational education and technical training to meet current and projected occupational needs;
(3) Provide trainees with appropriate vocational evaluation, assessment, and counseling, support services, and job placement assistance;
(4) Result in trainees becoming employed in jobs related to their training upon completion of their training; and
(5) Use other appropriate Federal, State, and local programs to retrain, or provide services to, dislocated workers.
(b)
(1) Bases the proposed demonstration center for the training of dislocated workers on successful model vocational education programs that include components similar to the components required by this program, as evidenced by empirical data from those programs, in such factors as—
(i) Student performance and achievement in vocational and technical training;
(ii) High school graduation;
(iii) Placement of students in jobs, including military service; and
(iv) Successful transfer of students to a variety of postsecondary education programs;
(2) Proposes project objectives that contribute to the improvement of education; and
(3) Proposes to use innovative techniques to address educational problems and needs that are of national significance.
(c)
(1) The quality of the project design, especially the establishment of measurable objectives for the project that are based on the project's overall goals;
(2) The extent to which the plan of management is effective and ensures proper and efficient administration of the project over the award period;
(3) How well the objectives of the project relate to the purpose of the program;
(4) The quality of the applicant's plan to use its resources and personnel to achieve each objective including the use of appropriate existing Federal, State, and local programs; and
(5) How the applicant will ensure that project participants who are otherwise eligible to participate are selected without regard to race, color, national origin, gender, age, or disability.
(d)
(1) Is clearly explained and is appropriate to the project;
(2) To the extent possible, is objective and will produce data that are quantifiable;
(3) Identifies expected outcomes of the participants and how those outcomes will be measured;
(4) Includes activities during the formative stages of the project to help guide and improve the project, as well as a summative evaluation that includes recommendations for replicating project activities and results;
(5) Will provide a comparison between intended and observed results, and lead to the demonstration of a clear link between the observed results and the specific treatment of project participants; and
(6) Will yield results that can be summarized and submitted to the Secretary for review by the Department's Program Effectiveness Panel as defined in 34 CFR 400.4(b).
(e)
(1) High quality in the design of the dissemination plan and procedures for evaluating the effectiveness of the dissemination plan;
(2) Provisions for publicizing the project at the local, State, and national levels by conducting or delivering presentations at conferences, workshops, and other professional meetings and by preparing materials for journal articles, newsletters, and brochures;
(3) Identification of target groups and provisions for demonstrating the methods and techniques used by the project to others interested in replicating these methods and techniques, such as by inviting them to observe project activities;
(4) A description of the types of materials the applicant plans to make available to help others replicate project activities and the methods for making the materials available; and
(5) Provisions for assisting others to adopt and successfully implement the project or methods and techniques used by the project.
(f)
(i) The qualifications, in relation to project requirements, of the project director;
(ii) The qualifications, in relation to project requirements, of each of the other key personnel to be used in the project;
(iii) The appropriateness of the time that each person referred to in paragraphs (f)(1) (i) and (ii) of this section will commit to the project; and
(iv) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected for employment without regard to race, color, national origin, gender, age, or disability.
(2) To determine personnel qualifications under paragraphs (f)(1) (i) and (ii) of this section, the Secretary considers—
(i) The experience and training of key personnel in project management and in fields related to the objectives of the project; and
(ii) Any other qualifications of key personnel that pertain to the quality of the project.
(g)
(1) The budget is cost effective and adequate to support the project activities;
(2) The budget contains costs that are reasonable and necessary in relation to the objectives of the project; and
(3) The budget proposes using non-Federal resources available from appropriate employment, training, and education agencies in the State to provide project services and activities and to acquire demonstration center equipment and facilities.
(h)
(i) The facilities that the applicant plans to use are adequate; and
(ii) The equipment and supplies that the applicant plans to use are adequate.
(2) The Secretary reviews each application to determine the commitment to the project, including whether the—
(i) Uses of non-Federal resources are adequate to provide project services and activities, especially resources of community organizations and State and local educational agencies; and
(ii) Applicant has the capacity to continue, expand, and build upon the
After evaluating the applications according to the criteria in § 415.21, the Secretary may select applications other than the most highly rated applications if doing so would improve the geographical distribution of projects funded under this program.
(a) Each grantee shall provide and budget for an independent evaluation of grant activities.
(b) The evaluation must be both formative and summative in nature.
(c) The evaluation must be based on student achievement, completion, and placement rates and project and product spread and transportability.
(d) A proposed project evaluation design must be submitted to the Secretary for review and approval prior to the end of the first year of the project period.
(e) A summary of evaluation activities and results that can be reviewed by the Department's Program Effectiveness Panel, as defined in 34 CFR 400.4(b), must be submitted to the Secretary during the last year of the project period.
20 U.S.C. 2416, unless otherwise noted.
The Business and Education Standards Program provides financial assistance for organizing and operating business-education-labor technical committees that will develop national standards for competencies in industries and trades.
The following entities are eligible for an award under this program:
(a) Industrial trade associations.
(b) Labor organizations.
(c) National joint apprenticeship committees.
(d) Comparable national organizations, such as educational associations, industry councils, business and industry organizations, and associations of private or national research organizations.
The Secretary provides grants and cooperative agreements for projects that organize and operate business-labor-education technical committees that propose national standards for competencies in industries and trades, including standards for—
(a) Major divisions or specialty areas identified within occupations studied;
(b) Minimum hours of study to be competent in those divisions or specialty areas;
(c) Minimum tools and equipment required in those divisions or specialty areas;
(d) Minimum qualifications for instructional staff; and
(e) Minimum tasks to be included in any course of study purporting to prepare individuals for work in those divisions or specialty areas.
The following regulations apply to the Business and Education Standards Program:
(a) The regulations in this part 421.
(b) The regulations in 34 CFR part 400.
The definitions in 34 CFR 400.4 apply to this part.
(a) The Secretary evaluates an application for a grant or cooperation agreement on the basis of the criteria in § 421.21.
(b) The Secretary may award up to 100 points, including a reserved 15 points to be distributed in accordance with paragraph (d) of this section, based on the criteria in § 421.21.
(c) Subject to paragraph (d) of this section, the maximum possible score for each criterion is indicated in parentheses after the heading for each criterion.
(d) For each competition as announced through a notice published in the
The Secretary uses the following criteria to evaluate an application:
(a)
(1) To develop standards for—
(i) The competencies required for actual jobs, including the increased competency requirements created by the changing workplace;
(ii) Major divisions or specialty areas identified within the occupations the applicant proposes to study;
(iii) The minimum hours of study needed to be competent in those divisions or specialty areas;
(iv) Minimum tools and equipment required in those divisions or specialty areas;
(v) Minimum tasks to be included in any course of study purporting to prepare individuals for work in those divisions or specialty areas; and
(vi) Minimum qualifications for instructional staff in those divisions or specialty areas; and
(2) An adequate needs assessment of the program factors described in paragraph (a)(1) of this section as a part of the project.
(b)
(1) The extent of the need for national standards for competencies in the major division or specialty areas identified within the occupations that the applicant proposes to study;
(2) How the applicant identified and documented those needs;
(3) How the standards to be developed will meet those needs, including the need of business for competent entry-level workers in the occupations to be studied; and
(4) The benefits to business, labor, and education that will result from meeting those needs.
(c)
(1) The plan of management will be effective, will ensure proper and efficient administration of the program, and includes timelines that show starting and ending dates for all tasks;
(2) The specific procedures proposed will accomplish the project's objectives, including how the procedures for selecting the business-labor-education technical committees will ensure that the members are knowledgeable about the occupations to be studied and include representatives of business, labor, and education;
(3) The applicant plans to organize and operate the business-labor-education technical committees effectively in developing national standards for competencies in industries and trades;
(4) The development of proposed competencies for major divisions or specialty areas within occupations will be coordinated with education and industrial trade associations, labor organizations, and businesses;
(5) The methods the applicant proposes to use to select project participants, if applicable, will ensure that project participants who are otherwise eligible to participate are selected without regard to race, color, national origin, gender, age, or disability.
(d)
(1) A formative evaluation to help assess and improve the accuracy of standards for competencies; and
(2) A summative evaluation conducted by an independent evaluator.
(e)
(2) The Secretary reviews each application to determine the quality of key personnel the applicant plans to use including—
(i) The qualifications, in relation to project requirements, of the project director, if one is to be used;
(ii) The qualifications, in relation to project requirements, of each of the other key personnel to be used in the project;
(iii) The appropriateness of the time that each person referred to in paragraphs (e)(2) (i) and (ii) of this section will commit to the project; and
(iv) The experience and training of the project director and key personnel in project management.
(f)
(1) The budget is adequate to support the project; and
(2) Costs are reasonable in relation to the objectives of the project.
(g)
(1) A clear description of the dissemination procedures;
(2) A description of the types of materials the applicant plans to make available;
(3) Provisions for publicizing the proposed national standards for competencies in industries and trades; and
(4) Provisions for encouraging the adoption and use of the proposed standards by education and training programs.
(a) The Secretary pays no more than 50 percent of the cost of a project.
(b) Each recipient of an award under this part shall provide at least 50 percent of the cost of the business-labor-education technical committees established under the award.
20 U.S.C. 2420, unless otherwise noted.
The Demonstration Projects for the Integration of Vocational and Academic Learning Program provides financial assistance to projects that develop, implement, and operate programs using different models of curricula that integrate vocational and academic learning.
(a) The following entities are eligible for an award under the Demonstration Projects for the Integration of Vocational and Academic Learning Program:
(1) An institution of higher education.
(2) An area vocational education school.
(3) A secondary school funded by the Bureau of Indian Affairs.
(4) A State board of vocational education.
(5) A public or private nonprofit organization.
(6) A local educational agency.
(b) Consortia composed of the entities described in paragraph (a) of this section also are eligible for awards under this program.
(a) The Secretary provides grants or cooperative agreements to projects that develop, implement, and operate programs using different models of curricula that integrate vocational and academic learning by—
(1) Designing integrated curricula and courses;
(2) Providing inservice training for teachers of vocational education students and administrators in integrated curricula; and
(3) Disseminating information regarding effective integrative strategies to other school districts through the National Diffusion Network (NDN) under section 1562 of the Elementary and Secondary Education Act of 1965, as amended (20 U.S.C. 2962), or, in the case of projects that will be funded for less than three years, disseminating information about the design of a project necessary for effective integrative strategies to be supported, so that they may be disseminated through the NDN.
(b) Each project supported under this part must serve—
(1) Individuals who are members of special populations;
(2) Vocational students in secondary schools;
(3) Vocational students at postsecondary institutions;
(4) Individuals enrolled in adult programs; or
(5) Single parents, displaced homemakers, and single pregnant women.
The following regulations apply to the Demonstration Projects for the Integration of Vocational and Academic Learning Program:
(a) The regulations in this part 425.
(b) The regulations in 34 CFR part 400.
The definitions in 34 CFR 400.4 apply to this part.
(a) The Secretary evaluates an application on the basis of the criteria in § 425.21.
(b) The Secretary may award up to 100 points, including a reserved 15 points to be distributed in accordance with paragraph (d) of this section, based on the criteria in § 425.21.
(c) Subject to paragraph (d) of this section, the maximum possible score for each criterion is indicated in parentheses.
(d) For each competition, as announced in a notice published in the
The Secretary uses the following criteria to evaluate an application:
(a)
(1) The extent to which the project involves creative or innovative methods for integrating vocational and academic learning; and
(2) The quality of the services that the project will provide to—
(i) Individuals who are members of special populations;
(ii) Vocational students in secondary schools and at postsecondary institutions;
(iii) Individuals enrolled in adult programs; or
(iv) Single parents, displaced homemakers, and single pregnant women.
(b)
(1) Bases the proposed project on successful model vocational education programs that include components similar to the components required by this program, as evidenced by empirical data from those programs in such factors as—
(i) Student performance and achievement;
(ii) High school graduation;
(iii) Placement of students in jobs, including military service; and
(iv) Successful transfer of students to a variety of postsecondary education programs;
(2) Proposes project objectives that contribute to the improvement of education; and
(3) Proposes to use unique and innovative techniques that address the need to integrate vocational and academic learning, and produce benefits that are of national significance.
(c)
(1) The quality of the project design, especially the establishment of measurable objectives for the project that are based on the project's overall goals;
(2) The extent to which the plan of management is effective and ensures proper and efficient administration of the project over the award period;
(3) How well the objectives of the project relate to the purpose of the program;
(4) The quality of the applicant's plan to use its resources and personnel to achieve each objective; and
(5) How the applicant will ensure that project participants who are otherwise eligible to participate are selected without regard to race, color, national origin, gender, age, or disability.
(d)
(1) Carries out the requirements in § 425.30;
(2) Is clearly explained and is appropriate to the project;
(3) To the extent possible, is objective and will produce data that are quantifiable;
(4) Includes quality measures to assess the effectiveness of the curricular developed by the project;
(5) Identifies expected outcomes of the participants and how those outcomes will be measured;
(6) Includes activities during the formative stages of the project to help guide and improve the project, as well as a summative evaluation that includes recommendations for replicating project activities and results;
(7) Will provide a comparison between intended and observed results, and lead to the demonstration of a clear link between the observed results and the specific treatment of project participants; and
(8) Will yield results that can be summarized and submitted to the Secretary for review by the Department's Program Effectiveness Panel as defined in 34 CFR 400.4(b).
(e)
(1) High quality in the design of the dissemination plan and procedures for evaluating the effectiveness of the dissemination plan;
(2) Identification of the audience to which the project activities will be disseminated and provisions for publicizing the project at the local, State, and national levels by conducting, or delivering presentations at, conferences, workshops, and other professional meetings and by preparing materials for journal articles, newsletters, and brochures;
(3) Provisions for demonstrating the methods and techniques used by the project to others interested in replicating these methods and techniques, such as by inviting them to observe project activities;
(4) A description of the types of materials the applicant plans to make available to help others replicate project activities and the methods for making the materials available; and
(5) Provisions for assisting others to adopt and successfully implement the methods, approaches, and techniques developed by the project.
(f)
(i) The qualifications, in relation to project requirements, of the project director;
(ii) The qualifications, in relation to project requirements, of each of the other key personnel to be used in the project;
(iii) The appropriateness of the time that each person referred to in paragraphs (f)(1) (i) and (ii) of this section will commit to the project; and
(iv) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected for employment without regard to race, color, national origin, gender, age, or disability.
(2) To determine personnel qualifications under paragraphs (f)(1) (i) and (ii) of this section, the Secretary considers—
(i) The experience and training of key personnel in project management and in fields related to the objectives of the project; and
(ii) Any other qualifications of key personnel that pertain to the quality of the project.
(g)
(1) Is cost effective and adequate to support the project activities;
(2) Contains costs that are reasonable and necessary in relation to the objectives of the project; and
(3) Proposes using non-Federal resources available from appropriate employment, training, and education agencies in the State to provide project
(h)
(i) The facilities that the applicant plans to use are adequate; and
(ii) The equipment and supplies that the applicant plans to use are adequate.
(2) The Secretary reviews each application to determine the commitment to the project including whether the—
(i) Uses of non-Federal resources are adequate to provide project services and activities, especially resources of community organizations and State and local educational agencies; and
(ii) Applicant has the capacity to continue, expand, and build upon the project when Federal assistance under this part ends.
(a) After evaluating the applications according to the criteria in § 425.21, the Secretary determines whether the most highly rated applications—
(1) Are equitably distributed throughout the Nation;
(2) Offer significantly different approaches to integrating vocational and academic curricula; and
(3) Serve individuals described in § 425.3(b).
(b) The Secretary may select other applications for funding if doing so would improve the geographical distribution of, diversity of approaches in, or the diversity of populations to be served by projects funded under this program.
(a) Each grantee shall provide and budget for an independent evaluation of grant activities.
(b) The evaluation must be both formative and summative in nature.
(c) Each grantee shall employ adequate measures to evaluate the effectiveness of the curriculum approaches supported by the project.
(d) The evaluation must be based on student achievement, completion, and placement rates and project and product spread and transportability.
(e) A proposed project evaluation design must be submitted to the Secretary for review and approval prior to the end of the first year of the project period.
(f) A summary of evaluation activities and results that can be reviewed by the Department's Program Effectiveness Panel, as defined in 34 CFR 400.4(b), must be submitted to the Secretary during the last year of the project period.
20 U.S.C. 2420a, unless otherwise noted.
The Cooperative Demonstration Program provides financial assistance for—
(a) Model projects providing improved access to quality vocational education programs for individuals who are members of special populations and for men and women seeking nontraditional occupations;
(b) Projects that are examples of successful cooperation between the private sector and public agencies in vocational education;
(c) Projects to overcome national skill shortages;
(d) Projects that develop consumer and homemaking education programs, including child growth and development centers;
(e) Projects that assist disadvantaged youths in preparing for technical and professional health careers; and
(f) Model projects providing access to vocational education programs through agriculture action centers.
(a) The following entities are eligible to apply for an award for activities described in §§ 426.4, 426.5, and 426.7:
(1) State educational agencies.
(2) Local educational agencies.
(3) Postsecondary educational institutions.
(4) Institutions of higher education.
(5) Other public and private agencies, organizations, and institutions.
(b)(1) Awards for activities described in § 426.6 are provided to partnerships between—
(i) Community-based organizations; and
(ii) Local schools, institutions of higher education, and businesses.
(2) A partnership formed for the purpose of receiving an award under § 426.6 shall include as partners at least one community-based organization and at least one entity from the groups listed in paragraph (b)(1)(ii) of this section, and may include more than one entity from each group.
(3) The partners shall apply jointly to the Secretary for an award under this part.
(4) The partners shall enter into an agreement, in the form of a single document signed by all partners, designating one member of the partnership as the applicant and the grantee. The agreement must also detail the role each partner plans to perform, and must bind each partner to every statement and assurance made in the application.
(a) The Secretary supports, directly or through grants, cooperative agreements, or contracts, the following types of projects:
(1)
(2)
(3)
(4)
(b) All projects assisted under the Cooperative Demonstration Program must be—
(1) Of direct service to the individuals enrolled; and
(2) Capable of wide replication by service providers.
The Secretary supports the following types of projects:
(a) Model projects providing improved access to quality vocational education programs for—
(1) Individuals with disabilities;
(2) Educationally and economically disadvantaged individuals (including foster children);
(3) Individuals of limited English proficiency;
(4) Individuals who participate in programs designed to eliminate sex bias;
(5) Individuals in correctional institutions; and
(6) Men and women seeking to enter nontraditional occupations.
(b)(1) Projects that are examples of successful cooperation between the private sector (including employers, consortia of employers, labor organizations, building trade councils, and private agencies, organizations, and institutions) and public agencies in vocational education (including State boards of vocational education and eligible recipients as defined in 34 CFR 400.4).
(2) The projects described in paragraph (b)(1) of this section must be designed to demonstrate ways in which vocational education and the private sector of the economy can work together effectively to assist vocational education students to attain the advanced level of skills needed to make the transition from school to productive employment, including—
(i) Work experience and apprenticeship projects;
(ii) Transitional work site job training for vocational education students that is related to their occupational goals and closely linked to classroom and laboratory instruction provided by an eligible recipient;
(iii) Placement services in occupations that the students are preparing to enter;
(iv) If practical, projects that will benefit the public, such as the rehabilitation of public schools or housing in inner cities or economically depressed rural areas; or
(v) Employment-based learning programs.
(3) The projects described in paragraphs (b) (1) and (2) of this section may include institutional and on-the-job training, supportive services authorized by the Act, and other assistance as the Secretary determines to be necessary for the successful completion of the project.
(c) Projects to overcome national skill shortages, as designated by the Secretary in cooperation with the Secretary of Labor, Secretary of Defense, and Secretary of Commerce.
The Secretary supports model projects that develop programs and improve instruction and curricula related to—
(a) Managing individual and family resources;
(b) Making consumer choices;
(c) Balancing work and family;
(d) Improving responses to individual and family crises, including family violence and child abuse;
(e) Strengthening parenting skills, especially among teenage parents;
(f) Preventing teenage pregnancy;
(g) Assisting aged individuals with disabilities, and members of at-risk populations, including the homeless;
(h) Conserving limited resources;
(i) Improving individual, child, and family nutrition and wellness;
(j) Understanding the impact of new technology on life and work;
(k) Applying consumer and homemaking education skills to jobs and careers;
(l) Other needs to be determined by the State board of vocational education; and
(m) Developing child growth and development centers.
(a) The Secretary supports projects that assist disadvantaged youths in preparing for technical and professional health careers.
(b) The Secretary may require partnerships described in § 426.2(b)(1) to provide in-kind contributions from participating schools, institutions, and businesses and to involve health professionals serving as instructors and counselors.
The Secretary supports model Agriculture Action Centers that provide improved access to vocational education programs and that—
(a) Assist individuals—
(1) Who are adversely affected by farm and rural economic downturns;
(2) Who are dislocated from farming; and
(3) Who are dislocated from agriculturally related businesses and industries that are adversely affected by farm and rural economic downturns;
(b) Provide services, including—
(1) Crisis management counseling and outreach counseling that would include members of the family of the affected individual;
(2) Evaluation of vocational skills and counseling on enhancement of these skills;
(3) Assistance in obtaining training in basic, remedial, and literacy skills;
(4) Assistance in seeking employment and training in employment-seeking skills; and
(5) Assistance in obtaining training related to operating a business or enterprise;
(c) Provide for formal and on-the-job training to the extent practicable; and
(d) Are coordinated with activities and discretionary programs under title III of the Job Training Partnership Act (29 U.S.C. 1651
The following regulations apply to the Cooperative Demonstration Program:
(a) The regulations in this part 426.
(b) The regulations in 34 CFR part 400.
The definitions in 34 CFR 400.4 apply to this part.
(a) The Secretary evaluates an application on the basis of the criteria in § 426.21, § 426.22, § 426.23, or § 426.24.
(b) The Secretary may award up to 100 points, including a reserved 15 points to be distributed in accordance with paragraph (d) of this section, based on the criteria in § 426.21, § 426.22, § 426.23, or § 426.24.
(c) Subject to paragraph (d) of this section, the maximum possible score for each criterion is indicated in parentheses after the heading for each criterion.
(d) For each competition, as announced in a notice published in the
The Secretary uses the following criteria to evaluate an application for a demonstration project:
(a)
(1) Vocational education to meet current and projected occupational needs; and
(2) For adequate and appropriate involvement and cooperation of the public and private sectors in the project, including—
(i) A clear identification of the public and private sector entities involved in the project;
(ii) A description of public and private sector involvement in the planning of the project; and
(iii) A description of public and private sector involvement in the operation of the project.
(b)
(1) Bases the proposed project on successfully designed, established, and operated model vocational education programs that include components similar to the components required by this program, as evidenced by empirical data from those programs in such factors as—
(i) Student performance and achievement;
(ii) High school graduation;
(iii) Placement of students in jobs, including military service; and
(iv) Successful transfer of students to a variety of postsecondary education programs;
(2) Proposes project objectives that contribute to the improvement of education; and
(3) Proposes to use unique and innovative techniques to produce benefits that address educational problems and needs that are of national significance.
(c)
(1) The quality of the project design, especially the establishment of measurable objectives for the project that are based on the project's overall goals;
(2) The extent to which the plan of management is effective and ensures proper and efficient administration of the project over the award period;
(3) How well the objectives of the project relate to the purpose of the program;
(4) The quality of the applicant's plan to use its resources and personnel to achieve each objective; and
(5) How the applicant will ensure that project participants who are otherwise eligible to participate are selected without regard to race, color, national origin, gender, age, or disability.
(d)
(1) Is clearly explained and is appropriate to the project;
(2) To the extent possible, is objective and will produce data that are quantifiable;
(3) Identifies expected outcomes of the participants and how those outcomes will be measured;
(4) Includes activities during the formative stages of the project to help guide and improve the project, as well as a summative evaluation that includes recommendations for replicating project activities and results;
(5) Will provide a comparison between intended and observed results, and lead to the demonstration of a clear link between the observed results and the specific treatment of project participants; and
(6) Will yield results that can be summarized and submitted to the Secretary for review by the Department's Program Effectiveness Panel as defined in 34 CFR 400.4(b).
(e)
(1) High quality in the design of the demonstration and dissemination plan and procedures for evaluating the effectiveness of the dissemination plan;
(2) Disseminating the results of the project in a manner that would meet the requirement in § 426.31;
(3) Identification of target groups and provisions for publicizing the project at the local, State, and national levels by conducting or delivering presentations at conferences, workshops, and other professional meetings and by preparing materials for journal articles, newsletters, and brochures;
(4) Provisions for demonstrating the methods and techniques used by the project to others interested in replicating these methods and techniques, such as by inviting them to observe project activities;
(5) A description of the types of materials the applicant plans to make available to help others replicate project activities and the methods for making the materials available; and
(6) Provisions for assisting others to adopt and successfully implement the project or methods and techniques used by the project.
(f)
(i) The qualifications, in relation to project requirements, of the project director;
(ii) The qualifications, in relation to project requirements, of each of the other key personnel to be used in the project. For the Community-Based Organization Projects, the Secretary determines the qualifications, in relation to project requirements, of health professionals serving as preceptors and counselors and of each of the other key personnel to be used in the project;
(iii) The appropriateness of the time that each person referred to in paragraphs (f)(1) (i) and (ii) of this section will commit to the project; and
(iv) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected for employment without regard to race, color, national origin, gender, age, or disability.
(2) To determine personnel qualifications under paragraphs (f)(1) (i) and (ii) of this section, the Secretary considers—
(i) The experience and training of key personnel in project management and in fields related to the objectives of the project. For the Program for Model Consumer and Homemaking Education Projects, the Secretary also considers the experience and training of key personnel in consumer and homemaking education; and
(ii) Any other qualifications of key personnel that pertain to the quality of the project.
(g)
(1) Is cost effective and adequate to support the project activities;
(2) Contains costs that are reasonable and necessary in relation to the objectives of the project; and
(3) Proposes using non-Federal resources available from appropriate employment, training, and education agencies in the State to provide project services and activities and to acquire project equipment and facilities. For the Community-Based Organization Projects, the Secretary also determines the extent to which the budget includes in-kind contributions from partnership members.
(h)
(i) Facilities that the applicant plans to use are adequate; and
(ii) Equipment and supplies that the applicant plans to use are adequate.
(2) The Secretary reviews each application to determine the commitment to the project, including whether the—
(i) Uses of non-Federal resources are adequate to provide project services and activities, especially resources of community organizations and State and local educational agencies; and
(ii) Applicant has the capacity to continue, expand, and build upon the project when Federal assistance under this part ends.
(a) The Secretary uses the following criteria to evaluate an application for a model consumer and homemaking education project:
(1)
(i) Be conducted for residents of economically depressed areas or areas with high rates of unemployment;
(ii) Encourage participation of traditionally underserved populations;
(iii) Encourage the elimination of sex bias and sex stereotyping; and
(iv) Address priorities and emerging concerns at the local, State, and national levels, such as the articulation of secondary and postsecondary consumer and homemaking education programs and the integration of basic skills in consumer and homemaking education programs.
(2)
(i) Bases the proposed consumer and homemaking education project on successful model education programs that include components similar to the components required by this program, as evidenced by empirical data from those programs in such factors as—
(A) Student performance and achievement;
(B) Placement of students in jobs, including the preparation of students for the occupation of homemaking; and
(C) Successful transfer of students to a wide variety of postsecondary educational programs;
(ii) Proposes project objectives that contribute to the improvement of consumer and homemaking education; and
(iii) Proposes to use unique and innovative techniques to produce benefits that address educational problems and needs that are of national significance.
(b) The Secretary also uses the criteria and points in § 426.21 (c) through (h) to evaluate an application.
The Secretary uses the following criteria to evaluate an application for a community-based organization project:
(a)
(1) Will assist disadvantaged youths in preparing for technical and professional health careers;
(2) Provides for adequate and appropriate involvement of local schools, institutions of higher education, and businesses in the project, including—
(i) Clear identification of partnership members;
(ii) Involvement of partnership members in the planning of the project;
(iii) Involvement of partnership members in the operation of the project; and
(3) Will coordinate activities to ensure that the project will help meet current and projected occupational needs in the area.
(b)
The Secretary uses the following criteria to evaluate an application for an Agriculture Action Center:
(a)
(1) Provide vocational education to meet current and projected occupational needs; and
(2) Be located in a service area that includes a high concentration of individuals who are—
(i) Adversely affected by farm and rural economic downturns;
(ii) Dislocated from farming; and
(iii) Dislocated from agriculturally-related businesses and industries that are adversely affected by farm and rural economic downturns.
(b)
After evaluating applications according to criteria in § 426.21, § 426.22, § 426.23, or § 426.24, the Secretary may fund other than the most highly rated applications if doing so would improve the geographical distribution of projects funded under this part.
(a) A recipient of an award under this part shall provide not less than 25 percent of the total cost (the sum of the Federal and non-Federal shares) of the project it conducts under this program.
(b) In accordance with subpart G of 34 CFR part 74, the non-Federal share may be in the form of cash or in-kind contributions, including the fair market value of facilities, overhead, personnel, and equipment.
Recipients must disseminate the results of projects assisted under this part in a manner designed to improve the training of teachers, other instructional personnel, counselors, and administrators who are needed to carry out the purposes of the Act.
(a) Each grantee shall provide and budget for an independent evaluation of grant activities.
(b) The evaluation must be both formative and summative in nature.
(c) The evaluation must be based on student achievement, completion, and placement rates and project and product spread and transportability.
(d) A proposed project evaluation design must be submitted to the Secretary for review and approval prior to the end of the first year of the project period.
(e) A summary of evaluation activities and results that can be reviewed by the Department's Program Effectiveness Panel, as defined in 34 CFR 400.4(b), must be submitted to the Secretary during the last year of the project period.
The Secretary may restrict the amount of Federal funds made available for equipment purchases to a certain percentage of the total grant for a project. The Secretary may announce
20 U.S.C. 2441(a), unless otherwise noted.
The Bilingual Vocational Training Program provides financial assistance for bilingual vocational education and training for limited English proficient out-of-school youth and adults, to prepare these individuals for jobs in recognized occupations and new and emerging occupations.
(a) The following entities are eligible for an award under this program:
(1) State agencies.
(2) Local educational agencies (LEAs).
(3) Postsecondary educational institutions.
(4) Private nonprofit vocational training institutions.
(5) Other nonprofit organizations specially created to serve or currently serving individuals who normally use a language other than English.
(b) Private for-profit agencies and organizations are eligible only for contracts under this program.
(a) The Secretary provides grants, cooperative agreements, or contracts for—
(1) Bilingual vocational training projects for limited English proficient out-of-school youth and adults who are available for training and employment;
(2) Bilingual vocational education and training projects for limited English proficient out-of-school youth and adults who have already entered the labor market but who desire or need English language skills and job skills training or retraining to achieve employment in a recognized occupation or new and emerging occupations, adjust to changing work force needs, expand their range of skills, or advance in employment; and
(3) Training stipends for participants in bilingual vocational training projects.
(b) Bilingual vocational training projects must include instruction in the English language to ensure that participants in that training will be equipped to pursue occupations in an English language environment.
(c) In the Commonwealth of Puerto Rico, the Bilingual Vocational Training Program may provide for the needs of students of limited Spanish proficiency.
The following regulations apply to the Bilingual Vocational Training Program:
(a) The regulations in 34 CFR part 400.
(b) The regulations in this part 427.
The definitions in 34 CFR 400.4 apply to this program.
(a) An application must—
(1) Provide an assurance that the activities and services for which assistance is sought will be administered by or under the supervision of the applicant;
(2) Propose a project of a size, scope, and design that will make a substantial contribution toward carrying out the purpose of the Bilingual Vocational Training Program;
(3) Contain measurable goals for the enrollment, completion, and placement of program participants;
(4) Include a comparison of how the applicant's goals take into consideration any related standards and measures in the geographic area for the Job Opportunities and Basic Skills Training (JOBS) program (42 U.S.C. 681
(5) Describe, for each occupation for which training is to be provided, how successful program completion will be determined and reported to the Secretary in terms of the academic and vocational competencies to be demonstrated by enrollees prior to successful completion and any academic or work credentials expected to be acquired upon completion; and
(6) Be submitted to the State board for vocational education (State board) established under section 111 of the Act for review and comment, including comment on the relationship of the proposed project to the State's vocational education program.
(b) An applicant shall include any comments received under paragraph (a)(6) of this section with the application.
(a) The Secretary evaluates an application for a grant or cooperative agreement on the basis of the criteria in § 427.21.
(b) The Secretary may award up to 100 points, including a reserved 15 points to be distributed in accordance with paragraph (d) of this section, based on the criteria in § 427.21.
(c) Subject to paragraph (d) of this section, the maximum possible points for each criterion is indicated in parentheses after the heading for each criterion.
(d) For each competition as announced through a notice published in the
The Secretary uses the following selection criteria to evaluate an application:
(a)
(1) The employment training need of limited English proficient individuals to be met;
(2) The labor market need to be met; and
(3) The relationship of the proposed project to other employment training programs in the community.
(b)
(2) The Secretary reviews each application to determine the extent to which the project defines successful program completion (or describes how successful program completion will be defined and reported to the Secretary) in a way consistent with the goals of the program for each occupation for which training is to be provided.
(3)(i) The Secretary reviews each application for specific information that, upon completion of their training, more than 65 percent of the trainees will be employed in jobs (including military specialties) related to their training, or will be enrolled for further training related to their training under this program. This information must correspond to the information described in paragraph (a) of this section.
(ii) The estimated job placement rate must be supported by past records, actual employer job commitments, anticipated job openings, or other pertinent information.
(4) The Secretary reviews each application for an effective plan of management that ensures proper and efficient administration of the project, including—
(i) Clearly defined project objectives that relate to the purpose of the Bilingual Vocational Training Program;
(ii) For each objective, the specific tasks to be performed in order to achieve the specified project objective;
(iii) How the applicant plans to use its resources and personnel to achieve each objective; and
(iv) If the applicant plans to use a project advisory committee, a clear plan for using a project advisory committee to assist in project development, to review curriculum materials, and to make recommendations about job placements.
(c)
(i) Provision of vocational skills instruction in English and the trainees’ native languages;
(ii) Provision of job-related English-as-a-second language instruction;
(iii) Coordination of the job-related English-as-a-second language instruction with the vocational skills instruction;
(iv) Recruitment procedures that are targeted towards limited English proficient out-of-school youth and adults who have the greatest need for bilingual vocational training;
(v) Assessment procedures that evaluate the language and vocational training needs of the trainees;
(vi) Provision of counseling activities and employability skills instruction that prepare trainees for employment in an English language environment; and
(vii) Job development and job placement procedures that provide opportunities for career advancement or entrepreneurship.
(2) The Secretary reviews each application to determine the project's potential to have a lasting impact in the local geographic area, including the potential impact of the project on—
(i) Program participants;
(ii) The agency or agencies responsible for administering the bilingual vocational training program;
(iii) Other employment training services in the local area; and
(iv) The community.
(d)
(i) The qualifications of the director and other key personnel to be used in the project;
(ii) The appropriateness of the time that each person referred to in paragraph (d)(1)(i) of this section will commit to the project; and
(iii) How the applicant, as part of its nondiscriminatory employment practices, will ensure that personnel will be selected without regard to race, color, national origin, gender, age, or disability.
(2) To determine personnel qualifications under paragraph (d)(1)(i) of this section, the Secretary considers—
(i) Experience and training in fields related to the objectives of the project;
(ii) Experience and training in project management; and
(iii) Any other qualifications that pertain to the quality of the project.
(e)
(1) The budget is sufficient to support the proposed project, and that it represents a cost effective use of Bilingual Vocational Training Program funds;
(2) Costs are necessary and reasonable in relation to the objectives of the proposed project; and
(3) The facilities, equipment, and supplies that the applicant plans to use are adequate for the proposed project.
(f)
(1) Is clearly explained and appropriate for the project;
(2) Identifies at a minimum, types of data to be collected and reported with respect to the English-language competencies and academic and vocational competencies demonstrated by participants and the number and kinds of academic and work credentials acquired by individuals who complete the training;
(3) Identifies at a minimum, types of data to be collected and reported with respect to enrollment, completion, and placement of participants by sex, racial or ethnic group, socio-economic status, and if appropriate, by level of English proficiency, for each occupation for which training is provided;
(4) Includes activities during the formative stages of the project to help guide and improve the project, as well as a summative evaluation that includes recommendations for replicating project activities and results; and
(5) Makes use of an external evaluator.
(g)
(1) High quality in the design of the demonstration and dissemination plan and procedures for evaluating the effectiveness of the dissemination plan;
(2) Provisions for publicizing the project at the local, State, and national levels by conducting or delivering presentations at conferences, workshops, and other professional meetings and by preparing materials for journal articles, newsletters, and brochures;
(3) Provisions for making available the methods and techniques used by the project to others interested in replicating these methods and techniques, such as by inviting them to observe project activities;
(4) A description of the types of materials the applicant plans to make available to help others replicate project activities and the methods for making the materials available; and
(5) Provisions for assisting others to adopt and successfully implement the project or methods and techniques used by the project.
(a) After evaluating the applications according to the criteria in § 427.21 and consulting with the appropriate State board established under section 111 of the Act, the Secretary determines whether the most highly rated applications are equitably distributed among populations of individuals with limited English proficiency within the affected State.
(b) The Secretary may select other applications for funding if doing so would improve the—
(1) Equitable distribution of assistance among populations of individuals with limited English proficiency within a State; or
(2) Geographical distribution of projects funded under this program.
(a) Each grantee shall annually provide and budget for an independent evaluation of its activities.
(b) The evaluation must be both formative and summative in nature.
(c) The annual evaluation must include descriptions and analyses of the accuracy of records and validity of measures by the project to establish and report on the English-language competencies and academic and vocational competencies demonstrated and the academic and work credentials acquired.
(d) The annual evaluation must contain descriptions and analyses of the accuracy of records and validity of measures used by the project to establish and report on participant enrollment, completion, and placement by sex, racial or ethnic group, socio-economic status, and, if appropriate, by level of English proficiency for each occupation for which training has been provided.
(e) The annual evaluation must also include—
(1) The grantee's progress in achieving the objectives in its approved application, including any approved revisions of the application;
(2) If applicable, actions taken by the grantee to address significant barriers impeding progress; and
(3) The effectiveness of the project in promoting key elements for participants’ job readiness, including—
(i) Coordination of services; and
(ii) Improved English-language, academic, and vocational skills competencies.
20 U.S.C. 2441(b), unless otherwise noted.
The Bilingual Vocational Instructor Training Program provides financial assistance for preservice and inservice training for personnel participating in or preparing to participate in bilingual vocational education and training programs for limited English proficient individuals.
(a) The following entities are eligible for grants, contracts, or cooperative agreements under this program:
(1) State agencies.
(2) Public and private nonprofit educational institutions.
(b) Private for-profit educational institutions are eligible only for contracts under this program.
(a) The Secretary provides assistance through grants, contracts, or cooperative agreements for—
(1) Preservice and inservice training for instructors, aides, counselors, or other ancillary personnel participating
(2) Fellowships and traineeships for individuals participating in preservice or inservice training.
(b) The Secretary does not make an award under this program unless the Secretary determines that the applicant has an ongoing vocational education program in the field in which participants will be trained, and can provide instructors with adequate language capabilities in the language other than English to be used in the bilingual vocational training project.
The following regulations apply to the Bilingual Vocational Training Program:
(a) The regulations in 34 CFR part 400.
(b) The regulations in this part 428.
The definitions in 34 CFR 400.4 apply to this program.
An application must—
(a) Provide an assurance that the activities and services for which assistance is sought will be administered by or under the supervision of the applicant;
(b) Propose a project of a size, scope and design that will make a substantial contribution toward carrying out the purpose of the Bilingual Vocational Instructor Training Program;
(c) Describe the capabilities of the applicant, including vocational training or education courses offered by the applicant, accreditation, and any certification of courses by appropriate State agencies;
(d) Describe the qualifications of principal staff to be used in the bilingual vocational instructor training project;
(e) Describe the number of participants to be served, the minimum qualifications for project participants, and the selection process for project participants;
(f) Include the projected amount of the fellowships or traineeships, if any;
(g) Contain sufficient information for the Secretary to make the determination required by § 428.3(b); and
(h) Provide an assurance that preservice training will be provided to individuals who have indicated their intent to engage as personnel in a vocational education program that serves limited English proficient individuals.
(a) The Secretary evaluates an application for a grant or cooperative agreement on the basis of the criteria in § 428.21.
(b) The Secretary may award up to 100 points, including a reserved 15 points to be distributed in accordance with paragraph (d) or this section, based on the criteria in § 428.21.
(c) Subject to paragraph (d) of this section, the maximum possible points for each criterion is indicated in parentheses after the heading for each criterion.
(d) For each competition, in a notice published in the
The Secretary uses the following selection criteria in evaluating each application:
(a)
(i) The need for the project in the specific geographic area or areas to be served by the proposed project;
(ii) The training needs of program participants to be served by the proposed project;
(iii) How these needs will be met through the proposed project; and
(iv) The relationship of the proposed project to other ongoing personnel development programs in the geographic area or areas to be served by the proposed project.
(2) The Secretary reviews each application to determine the extent to which, upon completion of their training, program participants will work with programs that provide vocational education to limited English proficient individuals.
(b)
(1) Potential to increase the skill level of program participants, with particular regard to the following areas:
(i) Knowledge of the needs of limited English proficient individuals enrolled in vocational education programs, and how those needs should influence teaching strategies and program design.
(ii) Understanding of bilingual vocational training methodologies.
(iii) Techniques for preparing limited English proficient individuals for employment; and
(2) Potential to increase access to vocational education for limited English proficient individuals.
(c)
(1) Clearly defined project objectives that relate to the purpose of the Bilingual Vocational Instructor Training Program;
(2) For each objective, the specific tasks to be performed in order to achieve the specified project objective; and
(3) How the applicant plans to use its resources and personnel to achieve each objective.
(d)
(i) The qualifications of the director and other key personnel to be used in the project;
(ii) The appropriateness of the time that each person referred to in paragraph (d)(1)(i) of this section will commit to the project; and
(iii) How the applicant, as part of its nondiscriminatory employment practices, will ensure that personnel will be selected without regard to race, color, national origin, gender, age, or disability.
(2) To determine personnel qualifications under paragraph (d)(1)(i) of this section, the Secretary considers—
(i) Experience and training in fields related to the objectives of the project;
(ii) Experience and training in project management; and
(iii) Any other qualifications that pertain to the quality of the project.
(e)
(1) The budget is sufficient to support the proposed project, and that it represents a cost effective use of Bilingual Vocational Instructor Training Program funds;
(2) Costs are necessary and reasonable in relation to the objectives of the proposed project; and
(3) The facilities that the applicant plans to use are adequate for the proposed project;
(f)
(1) Is clearly explained and appropriate for the bilingual vocational instructor training project;
(2) To the extent possible, is objective and will produce data that are quantifiable;
(3) Identifies outcomes of the project in terms of enrollment, completion and after-training work commitments of participants by sex, racial or ethnic group, and by level and kinds of language proficiency;
(4) Identifies expected learning and skills outcomes for participants and
(5) Includes activities during the formative stages of the project to help guide and improve the project, as well as a summative evaluation that includes recommendations for replicating project activities and results.
(g)
(1) High quality in its design and procedures for evaluating the effectiveness of the dissemination plan; and
(2) A description of the types of materials the applicant plans to develop and make available to help others replicate project activities, and the methods to be used to make the materials available.
(a) After evaluating the applications according to the criteria in § 428.21, and consulting with the appropriate State board established under section 111 of the Act, the Secretary determines whether the most highly rated applications are equitably distributed among populations of individuals with limited English proficiency within the affected State.
(b) The Secretary may select other applications for funding if doing so would improve the—
(1) Equitable distribution of assistance among populations of individuals with limited English proficiency within the affected State; or
(2) Geographical distribution of projects funded under this program.
Sec. 441(c) of the Carl D. Perkins Vocational Education Act, 20 U.S.C. 2441(c), as enacted by Pub. L. 98-524, unless otherwise noted.
The Bilingual Vocational Materials, Methods, and Techniques Program provides financial assistance for the development of instructional and curriculum materials, methods, or techniques for bilingual vocational training
(a) The following are eligible to apply for grants, contracts, or cooperative agreements under this program:
(1) State agencies.
(2) Educational institutions.
(3) Nonprofit organizations.
(b) The following are eligible for contracts under this program:
(1) Private for-profit organizations.
(2) Individuals.
The following regulations apply to the Bilingual Vocational Materials, Methods, and Techniques Program:
(a) The regulations in 34 CFR part 400.
(b) The regulations in this part.
The definitions in 34 CFR 400.4 apply to this program.
The Secretary provides assistance through grants, contracts, or cooperative agreements for—
(a) Research in bilingual vocational training;
(b) The development of instructional and curriculum materials, methods, or techniques;
(c) Training projects to familiarize State agencies and training institutions with research findings and with successful pilot and demonstration projects in bilingual vocational education and training; and
(d) Experimental, developmental, pilot, and demonstration projects.
(a) The Secretary may announce, through one or more notices published in the
(b) The Secretary may establish a separate competition for one or more of the priorities selected. If a separate competition is established for one or more priorities, the Secretary may reserve all applications that relate to those priorities for review as part of the separate competition.
An application under this part must—
(a) Describe the qualifications of staff responsible for the project; and
(b) Provide that the activities and services for which assistance is sought will be administered by or under the supervision of the applicant.
(a) The Secretary evaluates an application for a grant or cooperative agreement on the basis of the criteria in § 429.31.
(b) The Secretary may award up to 100 points, including a reserved 15 points to be distributed in accordance with paragraph (d) of this section, based on the criteria in § 429.31.
(c) Subject to paragraph (d) of this section, the maximum possible points for each criterion is indicated in parentheses after the heading for each criterion.
(d) For each competition, as announced in a notice published in the
The Secretary uses the following selection criteria in evaluating each application:
(a)
(2) The Secretary looks for information that shows—
(i) Specific evidence of the need; and
(ii) Specific information about how the need will be met.
(b)
(1) The Secretary reviews each application for information that shows the quality of the plan of operation for the project.
(2) The Secretary looks for information that shows—
(i) High quality in the design of the project;
(ii) An effective plan of management that ensures proper and efficient administration of the project;
(iii) A clear description of how the objectives of the project relate to the purpose of the program;
(iv) The way the applicant plans to use its resources and personnel to achieve each objective; and
(v) A clear description of how the applicant will provide equal access and treatment for eligible project participants who are members of groups that have been traditionally underrepresented, such as—
(A) Members of racial or ethnic minority groups;
(B) Women;
(C) Handicapped persons; and
(D) The elderly.
(c)
(1) The Secretary reviews each application for information that shows the qualifications of the key personnel the applicant plans to use on the project.
(2) The Secretary looks for information that shows—
(i) The qualifications of the project director (if one is to be used);
(ii) The qualifications of each of the other key personnel to be used in the project;
(iii) The time that each person referred to in paragraphs (c)(2) (i) and (ii) of this section will commit to the project; and
(iv) The extent to which the applicant, as part of its nondiscriminatory employment practices, encourages applications for employment from persons who are members of groups that have been traditionally underrepresented, such as—
(A) Members of racial or ethnic minority groups;
(B) Women;
(C) Handicapped persons; and
(D) The elderly.
(3) To determine personnel qualifications, the Secretary considers experience and training, in fields related to the objectives of the project, as well as other information that the applicant provides.
(d)
(1) The Secretary reviews each application for information that shows that the project has an adequate budget and is cost effective.
(2) The Secretary looks for information that shows—
(i) The budget for the project is adequate to support the project activities; and
(ii) Costs are reasonable in relation to the objectives of the project.
(e)
(1) The Secretary reviews each application for information that shows the quality of the evaluation plan for the project.
See 34 CFR 75.590 (Evaluation by the grantee).
(2) The Secretary looks for information that shows methods of evaluation that are appropriate for the project
(f)
(1) The Secretary reviews each application for information that shows that the applicant plans to devote adequate resources to the project.
(2) The Secretary looks for information that shows—
(i) The facilities that the applicant plans to use are adequate; and
(ii) The equipment and supplies that the applicant plans to use are adequate.
20 U.S.C. 1201
The purpose of the Adult Education Act (the Act) is to assist the States to—
(a) Improve educational opportunities for adults who lack the level of literacy skills requisite to effective citizenship and productive employment;
(b) Expand and improve the current system for delivering adult education services, including delivery of these services to educationally disadvantaged adults; and
(c) Encourage the establishment of adult education programs that will—
(1) Enable adults to acquire the basic educational skills necessary for literate functioning;
(2) Provide adults with sufficient basic education to enable them to benefit from job training and retraining programs and obtain and retain productive employment so that they might more fully enjoy the benefits and responsibilities of citizenship; and
(3) Enable adults who so desire to continue their education to at least the level of completion of secondary school.
The following programs are authorized by the Act:
(a) Adult Education State-administered Basic Grant Program (34 CFR part 426).
(b) State-administered Workplace Literacy Program (34 CFR part 433).
(c) State-administered English Literacy Program (34 CFR part 434).
(d) State Literacy Resource Centers Program (34 CFR part 464).
(e) National Workplace Literacy Program (34 CFR part 432).
(f) National Workforce Literacy Strategies Program (34 CFR part 473).
(g) National English Literacy Demonstration Program for Individuals of Limited English Proficiency (34 CFR part 435).
(h) Adult Migrant Farmworker and Immigrant Education Program (34 CFR part 436).
(i) National Adult Literacy Volunteer Training Program (34 CFR part 437).
(j) State Program Analysis Assistance and Policy Studies Program (34 CFR part 438).
(k) Functional Literacy for State and Local Prisoners Program (34 CFR part 489).
(l) Life Skills for State and Local Prisoners Program (34 CFR part 490).
The following regulations apply to the adult education programs:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs) applies to parts 472, 473, 474, 475, 476, 477, 489, and 490, except that 34 CFR 75.720(b), regarding the frequency of certain reports, does not apply.
(3) 34 CFR part 76 (State-Administered Programs) applies to parts 461, 462, 463, and 464, except that 34 CFR 76.101 (The general State application) does not apply.
(4) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(5) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(6) 34 CFR part 80 (Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments).
(7) 34 CFR part 81 (General Education Provisions Act—Enforcement).
(8) 34 CFR part 82 (New Restrictions on Lobbying).
(9) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(10) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 460.
(c) The regulations in 34 CFR parts 461, 462, 463, 464, 472, 473, 474, 475, 476, 477, 489, and 490.
(a)
(b)
(c)
(1) Has minimal competence in reading, writing, and computation;
(2) Is not sufficiently competent to meet the educational requirements of adult life in the United States; or
(3) Is not sufficiently competent to speak, read, or write the English language to allow employment commensurate with the adult's real ability.
(1) Is literate and can function in everyday life, but is not proficient; or
(2) Does not have a certificate of graduation (or its equivalent) from a school providing secondary education.
(1) Were not born in the United States or whose native language is a language other than English;
(2) Come from environments where a language other than English is dominant; or
(3) Are American Indian or Alaska Natives and who come from environments where a language other than English has had a significant impact on their level of English language proficiency; and
(4) Who, by reason thereof, have sufficient difficulty speaking, reading, writing, or understanding the English language to deny these individuals the opportunity to learn successfully in classrooms where the language of instruction is English or to participate fully in our society.
(1) The terms mean an adult lacking a fixed, regular, and adequate nighttime residence as well as an individual having a primary nighttime residence that is—
(i) A supervised publicly or privately operated shelter designed to provide temporary living accommodations (including welfare hotels, congregate shelters, and transitional housing for the mentally ill);
(ii) An institution that provides a temporary residence for individuals intended to be institutionalized; or
(iii) A public or private place not designed for, or ordinarily used as, a regular sleeping accommodation for human beings.
(2) The terms do not include any adult imprisoned or otherwise detained pursuant to an Act of the Congress or a State law.
(1) The production or processing of crops, dairy products, poultry, or livestock for initial commercial sale or as a principal means of personal subsistence;
(2) The cultivation or harvesting of trees; or
(3) Fish farms.
(1) Inform educationally disadvantaged adult populations of the availability and benefits of the adult education program;
(2) Actively recruit these adults to participate in the adult education program; and
(3) Assist these adults to participate in the adult education program by providing reasonable and convenient access and support services to remove barriers to their participation in the program.
20 U.S.C. 1201
The Adult Education State-administered basic Grant Program (the program) is a cooperative effort between the Federal Government and the States to provide adult education. Federal funds are granted to the States on a formula basis. Based on need and resources available, States fund local programs of adult basic education, programs of adult secondary education, and programs for adults with limited English proficiency.
State educational agencies (SEAs) are eligible for awards under this part.
(a) A State that desires to participate in the program shall designate the SEA as the sole State agency responsible for the administration and supervision of the program under this part.
(b) The SEA has the following general responsibilities:
(1) Development, submission, and implementation of the State application and plan, and any amendments to these documents.
(2) Evaluation of activities, as described in section 352 of the Act and § 461.46.
(3) Consultation with the State advisory council, if a State advisory council has been established under section 332 of the Act and § 461.50.
(4) Consultation with other appropriate agencies, groups, and individuals involved in the planning, administration, evaluation, and coordination of programs funded under the Act.
(5)(i) Assignment of personnel as may be necessary for State administration of programs under the Act.
(ii) The SEA must ensure that—
(A) These personnel are sufficiently qualified by education and experience; and
(B) There is a sufficient number of these personnel to carry out the responsibilities of the State.
(6) If the State imposes any rule or policy relating to the administration and operation of programs under the Act (including any rule or policy based on State interpretation of any Federal law, regulation, or guidance), the SEA shall identify the rule or policy as a State-imposed requirement.
(7) By July 25, 1993, development and implementation, in consultation with a widely representative group of appropriate experts, educators, and administrators, of indicators of program quality to be used to evaluate programs assisted under this part, as required by section 352 of the Act and § 461.46, to determine whether those programs are effective, including whether those programs are successfully recruiting, retaining, and improving the literacy skills of the individuals served under those programs.
The following regulations apply to the program:
(a) The regulations in this part 461.
(b) The regulations in 34 CFR part 460.
(a) The definitions in 34 CFR 460.4 apply to this part.
(b) For the purposes of this part, “State” includes the Federated States of Micronesia and the Republic of the Marshall Island.
An SEA shall submit the following to the Secretary as one document:
(a) A State plan, developed once every four years, that meets the requirements of the Act and contains the information required in § 461.12.
(b) A State application consisting of program assurances, signed by an authorized official of the SEA, to provide that—
(1) The SEA will provide such methods of administration as are necessary for the proper and efficient administration of the Act;
(2) Federal funds granted to the State under the Act will be used to supplement, and not supplant, the amount of State and local funds available for uses specified in the Act;
(3) Programs, services, and activities funded in accordance with the uses specified in section 322 of the Act are designed to expand or improve the quality of adult education programs, including programs for educationally disadvantaged adults, to initiate new programs of high quality, or, if necessary, to maintain programs;
(4) The SEA will provide such fiscal control and fund accounting procedures as may be necessary to ensure proper disbursement of, and accounting for, Federal funds paid to the State (including Federal funds paid by the State to eligible recipients under the Act);
(5) The SEA has instituted policies and procedures to ensure that copies of the State plan and all statements of general policy, rules, regulations, and procedures will be made available to the public;
(6) The SEA will comply with the maintenance of effort requirements in section 361(b) of the Act;
See § 461.42 What is the maintenance of effort requirement?
(7) Adults enrolled in adult basic education programs, including programs for adults with limited English proficiency, will not be charged tuition, fees, or any other charges, or be required to purchase any books or any other materials that are needed for participation in the program;
(8) The SEA may use not more than 20 percent of the funds granted to the State under the Act for programs of equivalency for a certificate of graduation from secondary school;
(9) As may be required by the Secretary, the SEA will report information concerning special experimental demonstration projects and teacher training projects supported under section 353 of the Act; and
(10) The SEA annually will report information abut the State's adult education students, programs, expenditures, and goals, as may be required by the Secretary.
In formulating the State plan, the SEA shall—
(a) Meet with and utilize the State advisory council, if a council is established under section 332 of the Act and § 461.50;
(b) After providing appropriate and sufficient notice to the public, conduct at least two public hearings in the State for the purpose of affording all segments of the public, including groups serving educationally disadvantaged adults, and interested organizations and groups, an opportunity to present their views and make recommendations regarding the State plan;
(c) Make a thorough assessment of —
(1) The needs of adults, including educationally disadvantaged adults, eligible to be served as well as adults proposed to be served and those currently served by the program; and
(2) The capability of existing programs and institutions to meet those needs; and
(d) State the changes and improvements required in adult education to fulfill the purposes of the Act and the options for implementing these changes and improvements.
(a) Consistent with the assessment described in § 461.11(c), a State plan must, for the four-year period covered by the plan—
(1) Describe the adult education needs of all segments of the adult population in the State identified in the assessment, including the needs of those adults who are educationally disadvantaged:
(2) Describe and provide for the fulfillment of the literacy needs of individuals in the State;
(3) Set forth measurable goals for improving literacy levels, retention in literacy programs, and long-term learning gains of individuals in the State and describe a comprehensive approach for achieving those goals, including the development of indicators of program quality as required by section 331(a)(2) of the Act and § 461.3(b)(7).
(4) Describe the curriculum, equipment, and instruments that are being used by instructional personnel in programs and indicate how current these elements are;
(5) Describe the means by which the delivery of adult education services will be significantly expanded (including efforts to reach typically underserved groups such as educationally disadvantaged adults, individuals of limited English proficiency, and adults with disabilities) through coordination
(6) Describe the means by which representatives of the public and private sectors were involved in the development of the State plan and how they will continue to be involved in the implementation of the plan, especially in the expansion of the delivery of adult education services by cooperation and collaboration with those public and private agencies, institutions, and organizations;
(7) Describe the capability of existing programs and institutions to meet the needs described in paragraph (a)(1) of this section, including the other Federal and non-Federal resources available to meet those needs;
(8) Describe the outreach activities that the State intends to carry out during the period covered by the plan, including specialized efforts—such as flexible course schedules, auxiliary aids and services, convenient locations, adequate transportation, and child care services—to attract and assist meaningful participation in adult education programs;
(9)(i) Describe the manner in which the SEA will provide for the needs of adults of limited English proficiency or no English proficiency by providing programs designed to teach English and, as appropriate, to allow these adults to progress effectively through the adult education program or to prepare them to enter the regular program of adult education as quickly as possible.
(ii) These programs may, to the extent necessary, provide instruction in the native language of these adults or may provide instruction exclusively in English.
(iii) These programs must be carried out in coordination with programs assisted under the Bilingual Education Act and with bilingual vocational education programs under the Carl D. Perkins Vocational and Applied Technology Education Act;
(10) Describe how the particular education needs of adult immigrants, the incarcerated, adults with disabilities, the chronically unemployed, homeless adults, the disadvantaged, and minorities in the State will be addressed;
(11)(i) Describe the progress the SEA has made in achieving the goals set forth in each State plan subsequent to the initial State plan filed in 1989; and
(ii) Describe how the assessment of accomplishments and the findings of program reviews and evaluations required by section 352 of the Act and § 461.46 were considered in establishing the State's goals for adult education in the plan being submitted;
(12) Describe the criteria the SEA will use in approving applications by eligible recipients and allocating funds made available under the Act to those recipients;
(13) Describe the methods proposed for joint planning and coordination of programs carried out under the Act with programs conducted under applicable Federal and State programs, including the Carl D. Perkins Vocational and Applied Technology Education Act, the Job Training Partnership Act, the Rehabilitation Act of 1973, the Individuals with Disabilities Education Act, the Immigration Reform and Control Act of 1986, the Higher Education Act of 1965, and the Domestic Volunteer Service Act, to ensure maximum use of funds and to avoid duplication of services;
(14) Describe the steps taken to utilize volunteers, particularly volunteers assigned to the Literacy Corps established under the Domestic Volunteer Service Act and volunteers trained in programs carried out under section 382 of the Act and 34 CFR part 476, but only to the extent that those volunteers supplement and do not supplant salaried employees;
(15) Describe the measures to be taken to ensure that adult education programs, services, and activities under the Act will take into account the findings of program reviews and evaluations required by section 352 of the Act and § 461.46;
See § 461.22. What criteria does the Secretary use in approving a State's description of efforts relating to program reviews and evaluation?
(16) Report the amount of administrative funds to be spent on program improvements;
(17) Contain assurances that financial assistance provided under this part is used to assist and expand existing programs and to develop new programs for—
(i) Adults whose lack of basic skills renders them unemployable;
(ii) Adults whose lack of basic skills keeps them, whether employed or unemployed, from functioning independently in society; and
(iii) Adults whose lack of basic skills severely reduces their ability to have a positive effect on the literacy of their children;
(18) Describe the SEA's policies, procedures, and activities for carrying out special experimental demonstration projects and teacher training projects that meet the requirements of § 461.33;
(19) Describe the SEA's policies, procedures, and activities for carrying out corrections education and education for other institutionalized adults that meet the requirements of § 461.32;
(20) Describe the SEA's planned use of Federal funds for administrative costs under § 461.40(a), including any planned expenditures for a State advisory council under § 461.50.
An additional source of funding exists under section 356(g) of the Act and 34 CFR part 464, but need not be reported under this paragraph.
(21) Include a summary of recommendations received and the SEA's responses to the recommendations made through the State plan development process required under § 461.11(b).
(b) Each State plan must provide assurance that public or private non-profit entities eligible under § 461.30—local educational agencies, public or private nonprofit agencies, community-based organizations, correctional education agencies, postsecondary educational institutions, institutions that serve educationally disadvantaged adults, and any other institution that has the ability to provide literacy services to adults and families—will be provided direct and equitable access to all Federal funds provided under this part, including—
(1) The right to submit applications directly to the SEA for those funds; and
(2) Use by the SEA of a process for selecting recipients of those funds that gives each agency, institution, and organization a fair chance of receiving an award.
(c) To be eligible to participate in the State-administered Workplace Literacy Program under section 371(b) of the Act, an SEA shall comply with the requirements in 34 CFR 462.10.
(d) To be eligible to participate in the State-administered English Literacy Program under section 372(a) of the Act, an SEA shall comply with the requirements in 34 CFR 463.10.
(e) In order for a State, or the local recipients within the State, to be eligible to apply for funds under the Adult Migrant Farmworker and Immigrant Education Program under section 381 of the Act and 34 CFR part 475, an SEA shall describe the types of projects appropriate for meeting the educational needs of adult migrant farm workers and immigrants under section 381 of the Act.
(a) An SEA shall submit its State plan to the Secretary not later than 90 days prior to the first program year for which the plan is in effect.
(b)(1) Not less than sixty days prior to submitting the State plan to the Secretary, the SEA shall give the State advisory council, if one is established under section 332 of the Act and § 461.50, an opportunity to review and comment on the plan.
(2) The SEA shall respond to all timely and substantive objections of the State advisory council and include with the State plan a copy of those objections and its response.
(c)(1) Not less than sixty days prior to submitting the State plan to the Secretary, the SEA shall give the following entities an opportunity to review and comment on the plan:
(i) The State board or agency for vocational education.
(ii) The State Job Training Coordinating Council under the Job Training Partnership Act.
(iii) The State board or agency for postsecondary education.
(2) Comments (to the extent those comments are received in a timely fashion) of entities listed in paragraph (c)(1) of this section and the SEA's response must be included with the State plan.
(a)
(b)
The Secretary determines the amount of each State's grant according to the formula in section 313(b) of the Act.
(a) Any amount of any State's allotment under section 313(b) of the Act that the Secretary determines is not required, for the period the allotment is available, for carrying out that State's plan, is reallotted to other States on dates that the Secretary may fix.
(b) The Secretary determines any amounts to be reallotted on the basis of—
(1) Reports, filed by the States, of the amounts required to carry out their State plans; and
(2) Other information available to the Secretary.
(c) Reallotments are made to other States in proportion to those State's original allotments for the fiscal year in which allotments originally were made, unless the Secretary reduces a State's proportionate share by the amount the Secretary estimates will exceed the sum the State needs and will be able to use under its plan.
(d) The total of any reductions made under paragraph (c) of this section is reallotted among those States whose proportionate shares were not reduced.
(e)(1) Any amount reallotted to a State during a fiscal year is deemed part of the State's allotment for that fiscal year.
(2) A reallotment of funds from one State to another State does not extend the period of time in which the funds must be obligated.
The Secretary considers the following criteria in approving a State's description of efforts relating to program reviews and evaluations under section 342(c)(13) of the Act and § 461.12(a)(15):
(a) The extent to which the State will have effective procedures for using the findings of program reviews and evaluations to identify, on a timely basis, those programs, services, and activities under the Act that are not meeting the educational goals set forth in the State plan and approved applications of eligible recipients.
(b) The adequacy of the State's procedures for effecting timely changes that will enable programs, services, and activities identified under paragraph (a) of this section to meet the educational goals in the State plan and
(c) The extent to which the State will continue to review those programs, activities, and services, and affect further changes as necessary to meet those educational goals.
(a) The Secretary approves, within 60 days of receipt, a State plan or amendment that the Secretary determines complies with the applicable provisions of the Act and the regulations in this part.
(b) In approving a State plan or amendment, the Secretary considers any information submitted in accordance with § 461.13 (b) and (c).
(c) The Secretary notifies the SEA, in writing, of the granting or withholding of approval.
(d) The Secretary does not finally disapprove a State plan or amendment without first affording the State reasonable notice and opportunity for a hearing.
(a) The following public or private nonprofit entities are eligible to apply to the SEA for an award:
(1) A local educational agency (LEA).
(2) A public or private nonprofit agency.
(3) A correctional education agency.
(4) A community-based organization.
(5) A postsecondary educational institution.
(6) An institution that serves educationally disadvantaged adults.
(7) Any other institution that has the ability to provide literacy services to adults and families.
(b) A public or private nonprofit entity listed in paragraph (a) of this section may apply on behalf of a consortium that includes a for-profit agency, organization, or institution that can make a significant contribution to attaining the objectives of the Act.
(c)(1) Each State shall also use an amount of funds provided under this part, as determined by the State given the State's needs and resources for adult education, for competitive 2-year grants to public housing authorities for literacy programs and related activities. Any public housing authority that receives a grant under this paragraph shall consult with local adult education providers in conducting programs and activities with assistance provided under the grant. Any grant provided under this paragraph is referred to as a “Gateway Grant.”
(2) For the purposes of this part, “public housing authority” means a public housing agency, as defined in 42 U.S.C. 1437a(b)(6), that participates in public housing, as defined in 42 U.S.C. 1437a(b)(1).
(a) In selecting local recipients, an SEA shall give preference to those local applicants that have demonstrated or can demonstrate a capability to recruit and serve educationally disadvantaged adults, particularly in areas with a high proportion of adults who do not have a certificate of graduation from a school providing secondary education or its equivalent.
(b) An SEA shall award funds on the basis of applications submitted by eligible recipients.
(c) In reviewing a local application, an SEA shall determine that the application contains the following:
(1) A description of current programs, activities, and services receiving assistance from Federal, State, and local sources that provide adult education in the geographic area proposed to be served by the applicant.
(2) A description of cooperative arrangements (including arrangements with business, industry, and volunteer literacy organizations as appropriate) that have been made to deliver services to adults.
(3) Assurances that the adult educational programs, services, or activities that the applicant proposes to provide are coordinated with and do not duplicate programs, services, or activities made available to adults under other Federal, State, and local programs, including the Job Training Partnership Act, the Carl D. Perkins Vocational and Applied Technology Education Act, the Rehabilitation Act of 1973, the Individuals with Disabilities Education Act, the Indian Education Act, the Higher Education Act of 1965, and the Domestic Volunteer Service Act.
(4) The projected goals of the applicant with respect to participant recruitment, retention, and educational achievement and how the applicant will measure and report progress in meeting its goals.
(5) Any other information the SEA considers necessary.
(d) In determining which programs receive assistance, the SEA shall consider—
(1) The past effectiveness of applicants in providing services (especially with respect to recruitment and retention of educationally disadvantaged adults and the learning gains demonstrated by those adults);
(2) The degree to which the applicant will coordinate and utilize other literacy and social services available in the community; and
(3) The commitment of the applicant to serve individuals in the community who are most in need of literacy services.
(e) In reviewing a local application, an SEA may consider the extent to which the application—
(1) Identifies the needs of the population proposed to be served by the applicant;
(2) Proposes activities that are designed to reach educationally disadvantaged adults;
(3) Describes a project that gives special emphasis to adult basic education;
(4) Describes adequate outreach activities, such as—
(i) Flexible schedules to accommodate the greatest number of adults who are educationally disadvantaged;
(ii) Location of facilities offering programs that are convenient to large concentrations of the adult populations identified by the State in its four-year State plan or how the locations of facilities will be convenient to public transportation; and
(iii) The availability of day care and transportation services to participants in the project;
(5) Describes proposed programs, activities, and services that address the identified needs;
(6) Describes the resources available to the applicant—other than Federal and State adult education funds—to meet those needs (for example, funds provided under the Job Training Partnership Act, the Carl D. Perkins Vocational and Applied Technology Education Act, the Rehabilitation Act of 1973, the Individuals with Disabilities Education Act, the Indian Education Act, the Higher Education Act of 1965, or the Domestic Volunteer Service Act, and local cash or in-kind contributions); and
(7) Describes project objectives that can be accomplished within the amount of the applicant's budget request.
(f) An SEA may not approve an application for a consortium that includes a for-profit agency, organization or institution unless the State has first determined that—
(1) The for-profit entity can make a significant contribution to attaining the objectives of the Act; and
(2) The public or private nonprofit agency, organization, or institution will enter into a contract with the for-profit agency, organization, or institution for the establishment or expansion of programs.
(g) If an SEA awards funds to a consortium that includes a for-profit agency, organization, or institution, the award must be made directly to the public or private nonprofit agency, organization, or institution that applies on behalf of the consortium.
(a) An SEA shall use not less than 10 percent of its grant for educational
(1) Academic programs for—(i) Basic education with special emphasis on reading, writing, vocabulary, and arithmetic;
(ii) Special education, as defined by State law;
(iii) Bilingual education or English-as-a-second-language instruction; and
(iv) Secondary school credit;
(2) Vocational training programs;
(3) Library development and library service programs;
(4) Corrections education programs, including training for teacher personnel specializing in corrections education, such as courses in social education, basis skills instruction, and abnormal psychology;
(5) Guidance and counseling programs;
(6) Supportive services for criminal offenders, with special emphasis on the coordination of educational services with agencies furnishing services to criminal offenders after their release; and
(7) Cooperative programs with educational institutions, community-based organizations of demonstrated effectiveness, and the private sector, that are designed to provide education and training.
(b)(1) An SEA shall establish its own statewide criteria and priorities for administering programs for corrections education and education for other institutionalized adults.
(2) The SEA shall determine that an application proposing a project under paragraph (a) of this section contains the information in § 461.31(c) and any other information the SEA considers necessary.
(a) In accordance with paragraph (b) of this section, an SEA shall use at least 15 percent of its grant for—
(1) Special projects that—
(i) Will be carried out in furtherance of the purposes of the Act;
(ii) Will be coordinated with other programs funded under the Act; and
(iii)(A) Involve the use of innovative methods (including methods for educating adults with disabilities, homeless adults, and adults of limited English proficiency), systems, materials, or programs that may have national significance or will be of special value in promoting effective programs under the Act; or
(B) Involve programs of adult education, including education for adults with disabilities, homeless adults, and adults of limited English proficiency, that are part of community school programs, carried out in cooperation with other Federal, State, or local programs that have unusual promise in promoting a comprehensive or coordinated approach to the problems of adults with educational deficiencies; and
(2)(i) Training persons engaged, or preparing to engage, as personnel in programs designed to carry out the purposes of the Act; and
(ii) Training professional teachers, volunteers, and administrators, with particular emphasis on—
(A) Training— (
(
(
(B) Training teachers to recognize and more effectively serve illiterate individuals with learning disabilities and individuals who have reading ability below the fifth grade level.
(b) An SEA shall use at least—
(1) 10 percent of its grant for the purposes in paragraph (a)(2) of this section; and
(2) Five percent of its grant for the purposes in paragraph (a)(1) or (a)(2) of this section, or both.
(c)(1) An SEA shall establish its own statewide criteria and priorities for providing and administering special experimental demonstration projects and teacher training projects.
(2) The SEA shall determine that an application proposing a project under paragraph (a) of this section contains—
(i) The information in § 461.31(c); and
(ii) Any other information the SEA considers necessary.
(a)(1) Beginning with the fiscal year 1991 grant (a grant that is awarded on or after July 1, 1991 from funds appropriated in the fiscal year 1991 appropriation), an SEA may use no more than 5 percent of its grant or $50,000—whichever is greater—for necessary and reasonable State administrative costs.
(2) For grants awarded from funds appropriated for fiscal years prior to fiscal year 1991 (grants awarded before July 1, 1991), an SEA may determine what percent of its grant is necessary and reasonable for State administrative costs.
(b)(1) At least 95 percent of an eligible recipient's award from the SEA must be expended for adult education instructional activities.
(2) The remainder may be used for local administrative costs—noninstructional expenses, including planning, administration, evaluation, personnel development, and coordination—that are necessary and reasonable.
(3) If the administrative cost limits under paragraph (b)(2) of this section are insufficient for adequate planning, administration, evaluation, personnel development, and coordination of programs supported under the Act, the SEA shall negotiate with local grant recipients in order to determine an adequate level of funds to be used for noninstructional purposes.
(a) The Federal share of expenditures made under a State plan for any of the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico may not exceed—
(1) 90 percent of the costs of programs carried out with the fiscal year 1988 grant (a grant that is awarded on or after July 1, 1988 from funds appropriated in the fiscal year 1988 appropriation);
(2) 90 percent of the costs of programs carried out with the fiscal year 1989 (a grant that is awarded on or after July 1, 1989 from funds appropriated in the fiscal year 1989 appropriation);
(3) 85 percent of the costs of programs carried out with the fiscal year 1990 grant (a grant that is awarded on or after July 1, 1990 from funds appropriated in the fiscal year 1990 appropriation);
(4) 80 percent of the costs of programs carried out with the fiscal year 1991 grant (a grant that is awarded on or after July 1, 1991 from funds appropriated in the fiscal year 1991 appropriation); and
(5) 75 percent of the costs of programs carried out with the fiscal year 1992 grant (a grant that is awarded on or after July 1, 1992 from funds appropriated in the fiscal year 1992 appropriation) and from each grant thereafter.
(b) The Federal share for American Samoa, Guam, the Northern Mariana Islands, the Federated States of Micronesia, the Republic of the Marshall Islands, Palau, and the Virgin Islands is 100 percent.
(c) The Secretary determines the non-Federal share of expenditures under the State plan by considering—
(1) Expenditures from State, local, and other non-Federal sources for programs, services, and activities of adult education, as defined in the Act, made by public or private entities that receive from the State Federal funds made available under the Act or State funds for adult education; and
(2) Expenditures made directly by the State for programs, services, and activities of adult education as defined in the Act.
(a)
(ii) The Secretary determines maintenance of effort on a per student expenditure basis or on a total expenditure basis.
(2) For purposes of determining maintenance of effort, the “second preceding fiscal year (or program year)” is the fiscal year (or program year) two years prior to the year of the grant for which the Secretary is determining the State's eligibility. The “third preceding fiscal year (or program year)” is the fiscal year (or program year) three years prior to the year of the grant for which the Secretary is determining the State's eligibility.
Computation based on fiscal year. If a State chooses to use the fiscal year as the basis for its maintenance of effort computations, the Secretary determines whether a State is eligible for the fiscal year 1992 grant (a grant that is awarded on or after July 1, 1992 from funds appropriated in the fiscal year 1992 appropriation) by comparing expenditures from the second preceding fiscal year—fiscal year 1990 (October 1, 1989-September 30, 1990)—with expenditures from the third preceding fiscal year—fiscal year 1989 (October 1, 1988-September 30, 1989). If there has been no decrease in expenditures from fiscal year 1989 to fiscal year 1990, the State has maintained effort and is eligible for its fiscal year 1992 grant.
(b)
(a) The Secretary may waive, for one year only, the maintenance of effort requirement in § 461.42 if the Secretary determines that a waiver would be equitable due to exceptional or uncontrollable circumstances. These circumstances include, but are not limited to, the following:
(1) A natural disaster.
(2) An unforeseen and precipitous decline in financial resources.
(b) The Secretary does not consider a tax initiative or referendum to be an exceptional or uncontrollable circumstance.
An SEA seeking a waiver of the maintenance of effort requirement in § 461.42 shall—
(a) Submit to the Secretary a request for a waiver; and
(b) Include in the request—
(1) The reason for the request; and
(2) Any additional information the Secretary may require.
If a State has been granted a waiver of the maintenance of effort requirement that allows it to receive a grant from appropriations for a fiscal year, the Secretary determines whether the State has meet that requirement for the grant to be awarded for the year after the year of the waiver by comparing the amount spent for adult education from non-Federal sources in the second preceding fiscal year (or program year) with the amount spent in the fourth preceding fiscal year (or program year.)
Because exceptional or uncontrollable circumstances prevented a State from maintaining effort in fiscal year 1990 (October 1, 1989-September 30, 1990) or in program year 1990 (July 1, 1989-June 30, 1990) at the level of fiscal year 1989 (October 1, 1988-September 30, 1989) or program year 1989 (July 1, 1988-June 30, 1989), respectively, the Secretary grants the State a waiver of the maintenance of effort requirement that permits the State to receive its fiscal year 1992 grant (a grant that is awarded on or after July 1,
(a) An SEA shall provide for program reviews and evaluations of all State-administered adult education programs, services, and activities it assists under the Act. The SEA shall use its program reviews and evaluations to assist LEAs and other recipients of funds in planning and operating the best possible programs of adult education and to improve the State's programs of adult education.
(b) In reviewing programs, an SEA shall, during the four-year period of the State plan, gather and analyze data—including standardized test data—on the effectiveness of State-administered adult education programs, services, and activities to determine the extent to which—
(1) The State's adult education programs are achieving the goals in the State plan, including the goal of serving educationally disadvantaged adults; and
(2) Grant recipients have improved their capacity to achieve the purposes of the Act.
(c)(1) An SEA shall, each year during the four-year period of the State plan, evaluate in qualitative and quantitative terms the effectiveness of programs, services, and activities conducted by at least 20 percent of the local recipients of funds so that at the end of that period 80 percent of all local recipients have been evaluated once.
(2) An evaluation must consider the following factors:
(i) Projected goals of the recipient as described in its application pursuant to section 322(a)(4) of the Act and § 461.31(c)(4).
(ii) Planning and content of the programs, services, and activities.
(iii) Curriculum, instructional materials, and equipment.
(iv) Adequacy and qualifications of all personnel.
(v) Achievement of the goals set forth in the State plan.
(vi) Extent to which educationally disadvantaged adults are being served.
(vii) Extent to which local recipients of funds have improved their capacity to achieve the purposes of the Act.
(viii) Success of the recipient in meeting the State's indicators of program quality after those indicators are developed as required by section 331(a)(2) of the Act and § 461.3(b)(7).
(ix) Other factors that affect program operations, as determined by the SEA.
(d)(1) Within 90 days of the close of each program year, the SEA shall submit to the Secretary and make public within the State the following:
(i) With respect to local recipients—
(A) The number and percentage of local educational agencies, community-based organizations, volunteer groups, and other organizations that are grant recipients;
(B) The amount of funds provided to local educational agencies, community-based organizations, volunteer groups, and other organizations that are grant recipients; and
(C) The results of the evaluations carried out as required by paragraph (c)(1) of this section in the year preceding the year for which the data are submitted.
(ii) The information required under § 461.10(b)(10).
(iii) A report on the SEA's activities under paragraph (b) of this section.
(iv) A report on the SEA's activities under paragraph (c) of this section.
(2) The reports described in paragraphs (d)(1)(ii) and (iii) of this section must include—
(i) The results of any program reviews and evaluations performed during the program year, and a description of how the SEA used the program reviews and evaluation process to make necessary changes to improve programs; and
(ii) The comments and recommendations of the State advisory council, if a council has been established under § 461.50.
(e) If an SEA has established a State advisory council, the SEA shall—
(1) Obtain approval of the plan for program reviews and evaluation from the State advisory council; and
(2) Inform the State advisory council of the results of program reviews and evaluations so that the State advisory council may perform its duties under section 332(f)(7) of the Act.
§ 461.46: In addition to the Adult Education State-administered Basic Grant Program in this part 461, State-administered adult education programs include the State-administered Workplace Literacy Program (See 34 CFR part 462) and the State-administered English Literacy Program (See 34 CFR part 463).
(a) A State that receives funds under section 313 of the Act may—
(1) Establish a State advisory council on adult education and literacy; or
(2) Designate an existing body as the State advisory council.
(b) If a State elects to establish or designate a State advisory council on adult education, the following provisions apply:
(1) The State advisory council must comply with §§ 461.51 and 461.52.
(2) Members to the State advisory council must be appointed by, and be responsible to, the Governor. The Governor shall appoint members in accordance with section 332(e) of the Act.
(3) Costs incurred for a State advisory council that are paid for with funds under this part must be counted as part of the allowable State administrative costs under the Act.
(4) The Governor of the State shall determine the amount of funding available to a State advisory council.
(5) A State advisory council's staffing may include professional, technical, and clerical personnel as may be necessary to enable the council to carry out its functions under the Act.
(6) Members of a State advisory council and its staff, while serving on the business of the council, may receive subsistence, travel allowances, and compensation in accordance with State law and regulations and State practices applicable to persons performing comparable duties and services.
(a)(1) The membership of a State advisory council must be broadly representative of citizens and groups within the State having an interest in adult education and literacy. The council must consist of—
(i) Representatives of public education;
(ii) Representatives of private and public sector employment;
(iii) Representatives of recognized State labor organizations;
(iv) Representatives of private literacy organizations, voluntary literacy organizations, and community-based literacy organizations;
(v) The Governor of a State, or the designee of the Governor;
(vi) Representatives of—
(A) The SEA;
(B) The State job training agency;
(C) The State human services agency;
(D) The State public assistance agency;
(E) The State library program; and
(F) The State economic development agency;
(vii) Officers of the State government whose agencies provide funding for literacy services or who may be designated by the Governor or the Chairperson of the council to serve whenever matters within the jurisdiction of the
(viii) Classroom teachers who have demonstrated outstanding results in teaching children or adults to read.
(2) The State shall ensure that there is appropriate representation on the State advisory council of—
(i) Urban and rural areas;
(ii) Women;
(iii) Persons with disabilities; and
(iv) Racial and ethnic minorities.
(b)(1) A State shall certify to the Secretary the establishment of, and membership of, its State advisory council.
(2) The certification must be submitted to the Secretary prior to the beginning of any program year in which the State desires to receive a grant under the Act.
(c) Members must be appointed for fixed and staggered terms and may serve until their successors are appointed. Any vacancy in the membership of the council must be filled in the same manner as the original appointment. Any member of the council may be removed for cause in accordance with procedures established by the council.
(a) Subject to paragraphs (b) and (c) of this section, the State advisory council shall determine its own procedures, staffing needs (subject to funding levels authorized by the Governor of the State), and the number, time, place, and conduct of meetings.
(b) The State advisory council shall meet at least four times each year. At least one of those meetings must provide an opportunity for the genral public to express views concerning adult education in the State.
(c) One member more than one-half of the members on the council constitute a quorum for the purpose of transmitting recommendations and proposals to the Governor of the State, but a lesser number of members may constitute a quorum for other purposes.
(d) A State advisory council shall—
(1) Meet with the State agencies responsible for literacy training during the planning year to advise on the development of a State plan for literacy and for adult education that fulfills the literacy and adult educations needs of the State, especially with respect to the needs of the labor market, economic development goals, and the needs of the individuals in the State;
(2) Advise the Governor, the SEA, and other State agencies concerning—
(i) The development and implementation of measurable State literacy and adult education goals consistent with section 342(c)(2) of the Act, especially with respect to—
(A) Improving levels of literacy in the State by ensuring that all appropriate State agencies have specific objectives and strategies for those goals in a comprehensive approach;
(B) Improving literacy programs in the State; and
(C) Fulfilling the long-term literacy goals of the State;
(ii) The coordination and monitoring of State literacy training programs in order to progress toward the long-term literacy goals of the State;
(iii) The improvement of the quality of literacy programs in the State by supporting the integration of services, staff training, and technology-based learning and the integration of resources of literacy programs conducted by various agencies of State government; and
(iv) Private sector initiatives that would improve adult education programs and literacy programs, especially through public-private partnerships;
(3) Review and comment on the plan submitted pursuant to section 356(h) of the Act and submit those comments to the Secretary;
(4) Measure progress on meeting the goals and objectives established pursuant to paragraph (d)(2)(i) of this section;
(5) Recommend model systems for implementing and coordinating State literacy programs for replication at the local level;
(6) Develop reporting requirements, standards for outcomes, performance measures, and program effectiveness in State program that are consistent with
(7)(i) Approve the plan for the program reviews and evaluations required in section 352 of the Act and § 461.46 and participate in implementing and disseminating the program reviews and evaluations. In approving the plan for the program reviews and evaluations, the State advisory council shall ensure that persons knowledgeable of the daily operation of adult education programs are involved;
(ii) Advise the Governor, the State legislature, and the general public of the State with respect to the findings of the program reviews and evaluations; and
(iii) Include in any reports of the program reviews and evaluations the council's comments and recommendations.
(a) A State may establish an advisory body that is funded solely from non-Federal sources.
(b) The advisory body described in paragraph (a) of this section is not required to comply with the requirements of section 332 of the Act and this part.
(c) The non-Federal funds used to support the advisory body may not be included in the non-Federal share of expenditures described in § 461.41(c).
20 U.S.C. 1208aa, unless otherwise noted.
The State Literacy Resource Centers Program assists State and local public and private nonprofit efforts to eliminate illiteracy through a program of State literacy resource center grants to—
(a) Stimulate the coordination of literacy services;
(b) Enhance the capacity of State and local organizations to provide literacy services; and
(c) Serve as a reciprocal link between the National Institute for Literacy and service providers for the purpose of
States are eligible to receive grants under this part.
(a) The Secretary makes grants under this part for purposes of establishing a network of State or regional adult literacy resource centers.
(b) Each State shall use funds provided under this part to conduct activities to—
(1) Improve and promote the diffusion and adoption of state-of-the-art teaching methods, technologies, and program evaluations;
(2) Develop innovative approaches to the coordination of literacy services within and among States and with the Federal Government;
(3) Assist public and private agencies in coordinating the delivery of literacy services;
(4) Encourage government and industry partnerships, including partnerships with small businesses, private nonprofit organizations, and community-based organizations;
(5) Encourage innovation and experimentation in literacy activities that will enhance the delivery of literacy services and address emerging problems;
(6) Provide technical and policy assistance to State and local governments and service providers to improve literacy policy and programs and access to those programs;
(7) Provide training and technical assistance to literacy instructors in reading instruction and in—
(i) Selecting and making the most effective use of state-of-the-art methodologies, instructional materials, and technologies such as—
(A) Computer-assisted instruction;
(B) Video tapes;
(C) Interactive systems; and
(D) Data link systems; or
(ii) Assessing learning style, screening for learning disabilities, and providing individualized remedial reading instruction; or
(8) Encourage and facilitate the training of full-time professional adult educators.
The following regulations apply to the State Literacy Resource Centers Program:
(a) The regulations in this part 464.
(b) The regulations in 34 CFR part 460.
The definitions in 34 CFR part 460 apply to this part.
(a) The Governor of a State may submit an application to the Secretary for a grant for a State adult literacy resource center.
(b) The Governors of a group of States may submit an application to the Secretary for a grant for a regional adult literacy resource center.
(c) A State may apply for and receive both a grant for a State adult literacy resource center and, as part of a group of States, a grant for a regional adult literacy resource center.
(d) If appropriate, a State shall obtain the review and comments of the State council on the application.
(e) An approved application remains in effect during the period of the State plan under 34 CFR part 461.
(f) Through a notice published in the
An application must describe how the State or group of States will—
(a) Develop a literacy resource center or expand an existing literacy resource center;
(b) Provide services and activities with the assistance provided under this part;
(c) Ensure access to services of the center for the maximum participation of all public and private programs and organizations providing or seeking to provide basic skills instruction, including local educational agencies, agencies responsible for corrections education, service delivery areas under the Job Training Partnership Act, welfare agencies, labor organizations, businesses, volunteer groups, and community-based organizations;
(d) Address the measurable goals for improving literacy levels as set forth in the plan submitted under section 342 of the Act; and
(e) Develop procedures for the coordination of literacy activities for statewide and local literacy efforts conducted by public and private organizations, and for enhancing the systems of service delivery.
A group of States may enter into an interstate agreement to develop and operate a regional adult literacy resource center for purposes of receiving assistance under this part if the States determine that a regional approach is more appropriate for their situation.
(a)(1) From sums available for purposes of making grants under this part for any fiscal year, the Secretary allots to each State, that has an application approved under §§ 464.10-464.11, an amount that bears the same ratio to those sums as the amount allotted to the State under section 313(b) of the Act for the purpose of making grants under section 321 of the Act bears to the aggregate amount allotted to all States under that section for that purpose.
(2) In applying the formula in section 313(b) of the Act to calculate grants under this part, the Secretary counts the number of adults only in States that have approved applications under this part.
(b)(1) The Secretary pays to each State the Federal share of the cost of activities described in the application.
(2) For purposes of this section, the Federal share—
(i) For each of the first two fiscal years in which the State receives funds under this part, may not exceed 80 percent;
(ii) For each of the third and fourth fiscal years in which the State receives funds under this part, may not exceed 70 percent; and
(iii) For the fifth and each succeeding year in which the State receives funds under this part, may not exceed 60 percent.
(3) If a State receives funds under this part for participation in a regional center, the State is required to provide only 50 percent of the non-Federal share under paragraph (b)(2) of this section.
(4) The non-Federal share of payments under this section may, in accordance with 34 CFR 80.24, be in cash or in kind, fairly evaluated, including plant, equipment, or services.
(a) If, in any fiscal year, a State's allotment under this part is less than $100,000, the Secretary may designate that State to receive the funds only as part of a regional center.
(b) Paragraph (a) of this section does not apply to a State—
(1) That demonstrates, in its application to the Secretary, that the total amount of Federal, State, local, and private funds expended to carry out the purposes of this part would equal or exceed $100,000; or
(2) That will use its funds to expand an existing State literacy resource center that meets the purposes of the Act and the requirements in this part.
In any fiscal year in which § 464.20(b)(3) applies, the Secretary may allow certain States that receive funds as part of a regional center to reserve a portion of those funds for a State adult literacy resource center under this part.
(a) To establish a new State literacy resource center, the Governor of each State that receives funds under this part shall contract on a competitive basis with—
(1) The SEA;
(2) One or more local educational agencies;
(3) A State office on literacy;
(4) A volunteer organization;
(5) A community-based organization;
(6) An institution of higher education; or
(7) Another non-profit entity.
(b) Paragraph (a) of this section does not apply to funds under this part that a State uses to expand an existing State literacy resource center.
A party participating in a competition under § 464.30 may not review its own proposal for a contract or any proposal of a competitor for that contract.
(a) The States that participate in a regional literacy resource center shall agree on how the center is to be established and operated.
(b) Subject to the requirements of the Act and the regulations in this part, the States have discretion to determine how to establish and operate the regional center.
(a) Each State receiving funds under this part may use up to five percent of those funds—
(1) To establish and support a State advisory council on adult education and literacy under section 332 of the Act and 34 CFR 461.50-461.52; or
(2) To support an established State council to the extent that the State council meets the requirements of section 332 of the Act and 34 CFR 461.50-461.52.
(b) Each State receiving funds under this section to establish or support a State council under section 332 of the Act shall provide matching funds on a dollar-for-dollar basis.
Equipment purchased under this part, when not being used to carry out the provisions of this part, may be used for other instructional purposes if—
(a) The acquisition of the equipment was reasonable and necessary for the purpose of conducting a properly designed project or activity under this part;
(b) The equipment is used after regular program hours or on weekends; and
(c) The other use is—
(1) Incidental to the use of the equipment under this part;
(2) Does not interfere with the use of the equipment under this part; and
(3) Does not add to the cost of using the equipment under this part.
Not more than ten percent of funds received under any grant under this part may be used to purchase computer hardware or software.
20 U.S.C. 1211(a), unless otherwise noted.
The National Workplace Literacy Program provides assistance for demonstration projects that teach literacy skills needed in the workplace through exemplary education partnerships between business, industry, or labor organizations and educational organizations.
(a) Awards are provided to exemplary partnerships between—
(1) A business, industry, or labor organization, or private industry council; and
(2) A State educational agency (SEA), local educational agency (LEA), institution of higher education, or school (including an area vocational school, an employment and training agency, or a community-based organization).
(b) A partnership shall include as partners at least one entity from paragraph (a)(1) of this section and at least one entity from paragraph (a)(2) of this section, and may include more than one entity from each group.
(c)(1) The partners shall apply jointly to the Secretary for funds.
(2) The partners shall enter into an agreement, in the form of a single document signed by all partners, designating one member of the partnership as the applicant and the grantee. The agreement must also detail the role each partner plans to perform, and must bind each partner to every statement and assurance made in the application.
The Secretary provides grants or cooperative agreements to projects designed to improve the productivity of the workforce through improvement of literacy skills in the workplace by—
(a) Providing adult literacy and other basic skills services and activities;
(b) Providing adult secondary education services and activities that may lead to the completion of a high school diploma or its equivalent;
(c) Meeting the literacy needs of adults with limited English proficiency;
(d) Upgrading or updating basic skills of adult workers in accordance with changes in workplace requirements, technology, products, or processes;
(e) Improving the competency of adult workers in speaking, listening, reasoning, and problem solving; or
(f) Providing educational counseling, transportation, and child care services for adult workers during nonworking hours while the workers participate in the project.
The following regulations apply to the National Workplace Literacy Program:
(a) The regulations in this part 472.
(b) The regulations in 34 CFR part 425.
(a) The definitions in 34 CFR 460.4 apply to this part.
(b) The following definitions also apply to this part:
(1) A specialized high school used exclusively or principally for the provision of vocational education to individuals who are available for study in preparation for entering the labor market;
(2) The department of a high school exclusively or principally used for providing vocational education in no less than five different occupational fields to individuals who are available for study in preparation for entering the labor market;
(3) A technical institute or vocational school used exclusively or principally for the provision of vocational education to individuals who have completed or left high school and who are available for study in preparation for entering the labor market; or
(4) The department or division of a junior college or community college or university operating under the policies of the State board and that provides vocational education in no less than five different occupational fields leading to immediate employment but not necessarily leading to a baccalaureate degree, if, in the case of a school, department, or division described in paragraphs (3) and (4) of this definition it admits as regular students both individuals who have completed high school and individuals who have left high school.
(1) For-profit businesses or industrial concerns;
(2) Nonprofit businesses or industrial concerns, such as hospitals and nursing homes;
(3) Associations of business and industry organizations, such as local or State Chambers of Commerce;
(4) Associations of private industry councils; and
(5) Educational associations—such as the American Association for Adult and Continuing Education, the American Council on Education, the National Association for Bilingual Education, the National Association of Independent Colleges and Universities, or the National Association of Technical and Trade Schools.
(1) Is organized for profit, with a place of business located in the United States and that makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials, or labor, or both; and
(2) May be in the legal form of an individual proprietorship, partnership, corporation, joint venture, association, trust or a cooperative, except that if the form is a joint venture, there can be no more than 49 percent participation by foreign business entities in the joint venture; and
(3) Meets the requirements found in 13 CFR part 121 concerning Standard Industrial Classification codes and size standards.
(a) The Secretary may announce through one or more notices published in the
(b) Priority may be given to projects training adult workers who have inadequate basic skills and who—
(1) Are currently unable to perform their jobs effectively or are ineligible for career advancement due to an identified lack of basic skills;
(2) Are employed in industries retooling with high technology and for whom training in basic skills is expected to result in continued employment;
(3) Require training in English-as-a-second-language in order to increase productivity, to continue employment, or to be eligible for career advancement; or
(4) Are employed in an industry adversely impacted by competitiveness in the world economy and for whom training is expected to result in the increased competitiveness of that industry in world markets.
(a) The Secretary evaluates an application on the basis of the criteria in § 472.22.
(b) The Secretary may award up to 100 points, including a reserved 10 points to be distributed in accordance with paragraph (d) of this section, based on the criteria in § 472.22.
(c) Subject to paragraph (d) of this section, the maximum possible score for each criterion is indicated in parentheses.
(d) For each competition as announced through a notice published in the
(e) In addition to the points to be awarded based on the criteria in § 472.22, the Secretary awards five points to applications from partnerships that include as a partner a small business that has signed the partnership agreement.
The Secretary uses the following criteria to evaluate an application:
(a)
(1) Demonstrates a strong relationship between skills taught and the literacy requirements of actual jobs, especially the increased skill requirements of the changing workplace;
(2) Is targeted to adults with inadequate skills for whom the training described is expected to mean new employment, continued employment, career advancement, or increased productivity;
(3) Includes support services, based on cooperative relationships within the partnership and from helping organizations, necessary to reduce barriers to participation by adult workers. Support services could include educational counseling, transportation, and child care during non-working hours while adult workers are participating in a project;
(4) Demonstrates the active commitment of all partners to accomplishing project goals; and
(5) Focuses on improving performance in jobs or job functions that have a broad representation within the Nation's workforce so that the products can be adapted for use by similar workplaces across the Nation.
(b)
(2) The adequacy of the applicant's documentation of the needs to be addressed by the project;
(3) How those needs will be met by the project; and
(4) The benefits to adult workers and their industries that will result from meeting those needs.
(c)
(1) Develop or use curriculum materials for adults based on literacy skills needed in the workplace;
(2) Use individualized educational plans developed jointly by instructors and adult learners;
(3) Take place in a readily accessible environment conducive to adult learning;
(4) Provide training through the partner classified under § 472.2(a)(2), unless transferring this activity to the partner classified under § 472.2(a)(1) is necessary and reasonable within the framework of the project; and
(5) Provide, and document for others, a program of training for staff including, but not limited to, techniques of curriculum development and special methods of teaching that are appropriate for workplace environments.
(d)
(2) The extent to which the plan of management is effective and ensures proper and efficient administration of the project, and includes—
(i) A description of the respective roles of each member of the partnership in carrying out the plan;
(ii) A description of the activities to be carried out by any contractors under the plan;
(iii) A description of the respective roles, including any cash or in-kind contributions, of helping organizations;
(iv) A description of the respective roles of any sites; and
(v) A realistic time table for accomplishing project objectives;
(3) How well the objectives of the project relate to the purposes of the program;
(4) The quality of the applicant's plan to use its resources and personnel to achieve each objective; and
(5) How the applicant will ensure that project participants, who are otherwise eligible to participate, are selected without regard to race, color, national origin, gender, age, or handicapping condition.
(e)
(2) The Secretary reviews each application to determine the quality of key personnel the applicant plans to use on the project including—
(i) The qualifications, in relation to project requirements, of the project director;
(ii) The qualifications, in relation to project requirements, of each of the other key personnel to be used in the project;
(iii) The time that each person referred to in paragraphs (e)(2) (i) and (ii) of this section will commit to the project; and
(iv) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected for employment without regard to race, color, national origin, gender, age, or handicapping condition.
(3) To determine personnel qualifications under paragraphs (e)(2) (i) and (ii) of this section, the Secretary considers—
(i) Experience and training in fields related to the objectives of the project;
(ii) Experience and training in project management; and
(iii) Any other qualifications that pertain to the quality of the project.
(f)
(1) Are clearly explained and appropriate to the project;
(2) To the extent possible, are objective and produce data that are quantifiable;
(3) Identify expected outcomes of the participants and how those outcomes will be measured;
(4) Include evaluation of effects on job advancement, job performance (including, for example, such elements as productivity, safety and attendance), and job retention;
(5) Are systematic throughout the project period and provide data that can be used by the project on an ongoing basis for program improvement; and
(6) Will yield results that can be summarized and submitted to the Secretary for review by the Department's Program Effectiveness Panel.
The Program Effectiveness Panel (PEP) is a mechanism the Department has developed for validating the effectiveness of educational programs developed by schools, universities, and other agencies. The PEP is composed of experts in the evaluation of educational programs and in other areas of education, at least two-thirds of whom are non-Federal employees who are appointed by the Secretary. Regulations governing the PEP are codified in 34 CFR parts 785-789. Specific criteria for PEP review are found in 34 CFR 786.12 or 787.12.
(g)
(1) The budget is adequate to support the project;
(2) Costs are reasonable and necessary in relation to the objectives of the project; and
(3) The applicant has minimized the purchase of equipment and supplies in order to devote a maximum amount of resources to instructional services.
(h)
(1) Demonstrating promising practices used by the project to others interested in implementing these techniques;
(2) Conducting workshops or delivering papers at national conferences or professional meetings; and
(3) Making available material that will help others implement promising practices developed in the project.
(i)
(1) The general, but realistic, forecast of literacy needs of members of the partnership and the capacity of the partners;
(2) Activities that will increase, during the grant period, the capacity of partners to provide a coherent program of learning in the workplace; and
(3) Activities that will lead to the continued provision or expansion of work-based literacy services built on successful outcomes of the project. For example, the partners could—
(A) Integrate workplace literacy services into the long-term planning of partner organizations;
(B) Create and implement policies and practices that encourage worker participation in workplace literacy and other education and training opportunities;
(C) Provide training that will enable partners to build a capacity to furnish necessary workplace literacy services in the future;
(D) Establish relationships within the partnership or with other entities that will continue provision of necessary workplace literacy services after the project ends; or
(E) Plan, after the project has ended, to expand services to other locations, divisions, or suppliers of the business or industry partners or labor organizations.
In addition to the criteria in § 472.22, the Secretary may consider whether funding a particular applicant would improve the geographical distribution of projects funded under this program.
(a) A recipient of a grant or cooperative agreement under this program shall submit to the Secretary performance and financial reports.
(b) These reports must be submitted at times required by the Secretary and at least semi-annually.
(c) These reports must contain information required by the Secretary.
(a) Each recipient of a grant or cooperative agreement under this program shall provide and budget for an independent evaluation of project activities.
(b) The evaluation must be both formative and summative in nature.
(c) The evaluation must be based on student learning gains and the effects on job advancement, job performance (including, for example, such elements as productivity, safety, and attendance), and project and product spread and transportability.
(d) A proposed project evaluation design for the entire project period, expanding on the plans outlined in the application pursuant to § 472.22(f), must be submitted to the Secretary for review and approval prior to the end of the first year of the project period.
(e) A summary of evaluation activities and results that can be reviewed by the Department's Program Effectiveness Panel, as described in 34 CFR parts 785-789, must be submitted to the Secretary during the last year of the project period.
(f) If a grantee cooperates in a Federal evaluation of its project, the Secretary may determine that the grantee fully or partially meets the evaluation requirements of this section and the reporting requirements in § 472.30.
As used in § 472.31(c)—
“
(1) Project activities and results are demonstrated to others;
(2) Technical assistance is provided to others to help them replicate project activities and results;
(3) Project activities and results are replicated at other sites; or
(4) Information and material about or resulting from the project are disseminated; and
“
(a) An applicant shall use funds to supplement and not supplant funds
(b)(1) The project period may include a start-up period, not to exceed six months, during which the project is being established and prior to the time services are provided to adult workers.
(2) Applicants shall minimize the start-up period, if any, proposed for their projects.
(c) [Reserved]
(d) An award under this program may be used to pay—
(1) 100 percent of the administrative costs incurred in establishing a project during the start-up period described in paragraph (b) of this section by an SEA, LEA, or other entity described in § 472.2(a), that receives a grant under this part; and
(2) 70 percent of the costs of a project after the start-up period.
(e) Each recipient of an award under this program shall provide for a project director.
(a) Projects serving adults with limited English proficiency or no English proficiency shall provide for the needs of these adults by teaching literacy skills needed in the workplace.
(b) Projects may teach workplace literacy skills—
(1) To the extent necessary, in the native language of these adults; or
(2) Exclusively in English.
(c) Projects must be carried out in coordination with programs assisted under the Bilingual Education Act and with bilingual vocational education programs under the Carl D. Perkins Vocational Education Act.
(a) A project may continue despite the withdrawal of a partner that is unable to perform its role as outlined in the grant award document if all of the following conditions are met:
(1) Written approval is given by the Secretary.
(2) The partnership continues to meet the requirements in § 472.2(b).
(3) The partnership will be able to complete the remainder of the project.
(4) The partner's withdrawal will not cause a change in the scope or objectives of the grant or cooperative agreement.
(b) In determining that the condition in paragraph (a)(4) of this section is satisfied, the Secretary considers such factors as whether—
(1) A similar new partner will sign the partnership agreement and agree to carry out the role of the withdrawing partner as described in the grant agreement;
(2) One or more of the remaining partners will agree to carry out the role of the withdrawing partner as described in the grant agreement; or
(3) One or more of the remaining partners will expand its activities as approved under the grant in order to compensate for the activities that would have been carried out under the grant agreement by the partner that is withdrawing without a change in the project's scope or objectives.
20 U.S.C. 1213b(a), unless otherwise noted.
The State Program Analysis Assistance and Policy Studies Program assists States in evaluating the status and progress of adult education in achieving the purposes of the Act.
(a) Public or private nonprofit agencies, organizations, or institutions are eligible for a grant or cooperative agreement under this program.
(b) Business concerns or public or private nonprofit agencies, organizations, or institutions are eligible for a contract under this program.
The Secretary may support the following directly or through awards:
(a) An analysis of State plans and of the findings of evaluations conducted in accordance with section 352 of the Act, with suggestions to State educational agencies for improvements in planning or program operation.
(b) The provision of an information network (in conjunction with the National Diffusion Network) on the results of research in adult education, the operation of model or innovative programs (including efforts to continue activities and services under the program after Federal funding has been discontinued), successful experiences in the planning, administration, and conduct of adult education programs, advances in curriculum and instructional practices, and other information useful in the improvement of adult education.
(c) Any other activities, including national policy studies, which the Secretary may designate, that assist States in evaluating the status and progress of adult education in achieving the purposes of the Act.
The following regulations apply to the State Program Analysis Assistance and Policy Studies Program:
(a) The Federal Acquisition Regulation (FAR) in 48 CFR chapter 1 and the Department of Education Acquisition Regulation (EDAR) in 48 CFR chapter 34 (applicable to contracts).
(b) The regulations in this part 477.
(c) The regulations in 34 CFR part 425.
The definitions in 34 CFR 425.4 apply to this part.
(a) The Secretary evaluates an application for a grant or cooperative agreement on the basis of the criteria in § 477.21.
(b) The Secretary may award up to 100 points, including a reserved 15 points to be distributed in accordance with paragraph (d) of this section, based on the criteria in § 477.21.
(c) Subject to paragraph (d) of this section, the maximum possible score for each criterion is indicated in parentheses.
(d) For each competition as announced through a notice published in the
The Secretary uses the following criteria to evaluate an application:
(a)
(b)
(1) The needs addressed by the project;
(2) How the applicant identified those needs;
(3) How those needs relate to project objectives; and
(4) The benefits to be gained by meeting those needs.
(c)
(1) The quality of the design of the project;
(2) The extent to which the plan of management is effective and ensures proper and efficient administration of the project;
(3) How well the objectives of the project relate to the purpose of the program; and
(4) The quality of the applicant's plan to use its resources and personnel to achieve each objective.
(d)
(i) The qualifications and experience of the project director, if one is to be used;
(ii) The qualifications and experience of each of the other key personnel to be used on the project;
(iii) The time that each person referred to in paragraphs (d)(1)(i) and (ii) of this section will commit to the project; and
(iv) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected for employment without regard to race, color, national origin, gender, age, or handicapping condition.
(2) To determine personnel qualifications under paragraphs (d)(1)(i) and (ii) of this section, the Secretary considers—
(i) Experience and training in fields related to the objectives of the project;
(ii) Experience and training in project management; and
(iii) Any other qualifications that pertain to the quality of the project.
(e)
(1) The budget is adequate to support the proposed project activities; and
(2) Costs are necessary and reasonable in relation to the objectives of the project.
(f)
(1) Are appropriate for the project; and
(2) To the extent possible, are objective and produce data that are quantifiable.
(g)
(h)
(1) The extent to which the project is designed to yield outcomes that can be readily disseminated;
(2) A description of the types of materials the applicant plans to make available and the methods for making the materials avialable; and
(3) Provisions for publicizing the findings of the project at the local,
In addition to the criteria in § 477.21, the Secretary may consider the following factors in making an award:
(a)
(b)
20 U.S.C. 1211-2, unless otherwise noted.
(a) The Secretary makes grants to eligible entities that elect to establish a demonstration or system-wide functional literacy program for adult prisoners, as described § 489.3.
(b) Grants under this part may be used for establishing, improving, expanding, or carrying out a program, and for developing the plans and submitting the reports required by this part.
A State correctional agency, a local correctional agency, a State correctional education agency, or a local correctional education agency is eligible for a grant under this part.
(a) To qualify for funding under § 489.1, a functional literacy program must—
(1) To the extent possible, make use of advanced technologies, such as interactive video- and computer-based adult literacy learning: and
(2) Include—
(i) A requirement that each person incarcerated in the system, prison, jail, or detention center who is not functionally literate, except a person described in paragraph (b) of this section, shall participate in the program until the person—
(A) Achieves functional literacy, or in the case of an individual with a disability, achieves a level of functional literacy commensurate with his or her ability;
(B) Is granted parole;
(C) Completes his or her sentence; or
(D) Is released pursuant to court order; and
(ii) A prohibition on granting parole to any person described in paragraph (a)(2)(i) of this section who refuses to participate in the program, unless the State parole board determines that the prohibition should be waived in a particular case; and
(iii) Adequate opportunities for appropriate education services and the screening and testing of all inmates for functional literacy and disabilities affecting functional literacy, including learning disabilities, upon arrival in the system or at the prison, jail, or detention center.
(b) The requirement of paragraph (a)(2)(i) does not apply to a person who—
(1) Is serving a life sentence without possibility of parole;
(2) Is terminally ill; or
(3) Is under a sentence of death.
The following regulations apply to the Functional Literacy for State and Local Prisoners Program:
(a) The regulations in this part 489.
(b) The regulations in 34 CFR 460.3.
(a) The definitions in 34 CFR 460.4 apply to this part.
(b) As used in this part—
An eligible entity may receive a grant under this part if the entity submits an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require, including, but not limited to, the following:
(a) An assurance that the entity will provide the Secretary such data as the Secretary may request concerning the cost and feasibility of operating the functional literacy programs authorized by § 489.1(a), including the annual reports required by § 489.30.
(b) A detailed plan outlining the methods by which the provisions of §§ 489.1 and 489.3 will be met, including specific goals and timetables.
(a) The Secretary evaluates an application on the basis of the criteria in § 489.21.
(b) The Secretary awards up to 100 points for these criteria, including 15 points that the Secretary assigns in accordance with paragraph (d) of this section.
(c) The maximum possible score for each criterion is indicated in parentheses.
(d) For each competition under this part, the Secretary, in a notice published in the
The Secretary uses the following criteria to evaluate an application:
(a)
(1) A clear description of the services to be offered;
(2) A complete description of the methodology to be used, including a thorough assessment of all offenders in the system and assessments necessary to identify offenders with disabilities affecting functional literacy;
(3) Flexibility in the manner that services are offered, including the provision of accessible class schedules;
(4) A strong relationship between skills taught and the literacy and skill requirements of the changing workplace; and
(5) An innovative approach, such as interactive video curriculum or peer tutoring that will provide a model that is replicable in other correctional facilities of a similar type or size; and
(6) Staff in-service education.
(b)
(1) Project objectives that contribute to the improvement of functional literacy;
(2) To use unique and innovative techniques to produce benefits that address functional literacy problems and needs that are of national significance; and
(3) To demonstrate how well those national needs will be met by the project.
(c)
(1) The quality of the design of the project;
(2) The extent to which the project includes specific intended outcomes that—
(i) Will accomplish the purposes of the program;
(ii) Are attainable within the project period, given the project's budget and other resources;
(iii) Are susceptible to evaluation;
(iv) Are objective and measurable; and
(v) For a multi-year project, include specific objectives to be met, during each budget period, that can be used to determine the progress of the project toward meeting its intended outcomes;
(3) The extent to which the plan of management is effective and ensures proper and efficient administration of the project;
(4) The quality of the applicant's plan to use its resources and personnel to achieve each objective and intended outcome during the period of Federal funding; and
(5) How the applicant will ensure that project participants who are otherwise eligible to participate are selected without regard to race, color, national origin, gender, age, or disabling condition.
(d)
(1) Are clearly explained and appropriate to the project;
(2) Will determine how successful the project is in meeting its intended outcomes, including an assessment of the effectiveness of the project in improving functional literacy of prisoners. To the extent feasible, the assessment must include a one-year post-release review, during the grant period, to measure the success of the project with respect to those prisoners who received services and were released. The assessment must involve comparison of the project to other existing education and training programs or no treatment for individuals, as appropriate. The evaluation must be designed to produce findings that, if positive and significant, can be used in submission of an application to the Department's Program Effectiveness Panel. To assess program effectiveness, consideration may be given to implementing a random assignment evaluation design. (Review criteria for the Program Effectiveness Panel are provided in 34 CFR 786.12.);
(3) Provide for an assessment of the efficiency of the program's replication
(4) Include formative evaluation activities to help assess program management and improve program operations; and
(5) To the extent possible, are objective and produce data that are quantifiable.
(e)
(1) High quality in the design of the demonstration and dissemination plan;
(2) Identification of target groups and provisions for publicizing the project at the local, State, and national levels by conducting or delivering presentations at conferences, workshops, and other professional meetings and by preparing materials for journal articles, newsletters, and brochures;
(3) Provisions for demonstrating the methods and techniques used by the project to others interested in replicating these methods and techniques, such as by inviting them to observe project activities;
(4) A description of the types of materials the applicant plans to make available to help others replicate project activities and the methods for making the materials available; and
(5) Provisions for assisting others to adopt and successfully implement the project or methods and techniques used by the project.
(f)
(1) The Secretary reviews each application to determine the quality of key personnel the applicant plans to use on the project, including—
(i) The qualifications, in relation to the objectives and planned outcomes of the project, of the project director;
(ii) The qualifications, in relation to the objectives and planned outcomes of the project, of each of the other key personnel to be used in the project, including any third-party evaluator;
(iii) The time that each person referred to in paragraphs (f)(1) (i) and (ii) of this section will commit to the project; and
(iv) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected for employment without regard to race, color, national origin, gender, age, or disabling condition.
(2) To determine personnel qualifications under paragraphs (f)(1) (i) and (ii) of this section, the Secretary considers experience and training in project management and in fields related to the objectives and planned outcomes of the project.
(g)
(1) Is cost effective and adequate to support the project activities;
(2) Contains costs that are reasonable and necessary in relation to the objectives of the project; and
(3) Proposes using non-Federal resources available from appropriate employment, training, and education agencies in the State to provide project services and activities and to acquire project equipment and facilities.
(h)
(1) The Secretary reviews each application to determine the extent to which the applicant plans to devote adequate resources to the project. The Secretary considers the extent to which—
(i) Facilities that the applicant plans to use are adequate; and
(ii) Equipment and supplies that the applicant plans to use are adequate.
(2) The Secretary reviews each application to determine the applicant's commitment to the project, including the extent to which—
(i) Non-Federal resources are adequate to provide project services and activities, especially resources of the public and private sectors; and
(ii) The applicant has the capacity to continue, expand, and build upon the project when Federal assistance ends.
(a) Within 90 days after the close of the first calendar year in which a literacy program authorized by § 489.1 is placed in operation, and annually for each of the 4 years thereafter, a grantee shall submit a report to the Secretary with respect to its literacy program.
(b) A report under paragraph (a) of this section must disclose—
(1) The number of persons who were tested for eligibility during the preceding year;
(2) The number of persons who were eligible for the literacy program during the preceding year;
(3) The number of persons who participated in the literacy program during the preceding year;
(4) The name and types of tests that were used to determine functional literacy and the names and types of tests that were used to determine disabilities affecting functional literacy;
(5) The average number of hours of instruction that were provided per week and the average number per student during the preceding year;
(6) Sample data on achievement of participants in the program, including the number of participants who achieved functional literacy;
(7) Data on all direct and indirect costs of the program; and
(8) Information on progress toward meeting the program's goals.
20 U.S.C. 1211-2, unless otherwise noted.
The Secretary may make grants to eligible entities to assist them in establishing and operating programs designed to reduce recidivism through the development and improvement of life skills necessary for reintegration of adult prisoners into society.
A State correctional agency, a local correctional agency, a State correctional education agency, or a local correctional education agency is eligible for a grant under this part.
The following regulations apply to the Life Skills for State and Local Prisoners Program:
(a) The regulations in this part 490.
(b) The regulations in 34 CFR 460.3.
(a) The definitions in 34 CFR 460.4 apply to this part.
(b) As used in this part—
To receive a grant under this part, an eligible entity shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary shall require, including, but not limited to, an assurance that the entity will report annually to the Secretary on the participation rate, cost, and effectiveness of the program and any other aspect of the program on which the Secretary may request information.
(a) The Secretary evaluates an application on the criteria in § 490.21.
(b) The Secretary awards up to 100 points for these criteria, including 15 points that the Secretary assigns in accordance with paragraph (d) of this section.
(c) The maximum possible score for each criterion is indicated in parentheses.
(d) For each competition under this part, the Secretary, in a notice published in the
The Secretary uses the following criteria to evaluate an application:
(a)
(1) A clear description of the services to be offered; and
(2) Life skills education designed to prepare adult offenders to reintegrate successfully into communities, schools and the workplace.
(b)
(1) Project objectives that contribute to the improvement of life skills;
(2) To use unique and innovative techniques to produce benefits that address life skills problems and needs that are of national significance; and
(3) To demonstrate how well those national needs will be met by the project.
(c)
(1) The quality of the design of the project;
(2) The extent to which the project includes specific intended outcomes that—
(i) Will accomplish the purposes of the program;
(ii) Are attainable within the project period, given the project's budget and other resources;
(iii) Are susceptible to evaluation;
(iv) Are objective and measurable; and
(v) For a multi-year project, include specific objectives to be met, during each budget period, that can be used to determine the progress of the project toward meeting its intended outcomes;
(3) The extent to which the plan of management is effective and ensures
(4) The quality of the applicant's plan to use its resources and personnel to achieve each objective and intended outcome during the period of Federal funding; and
(5) How the applicant will ensure that project participants who are otherwise eligible to participate are selected without regard to race, color, national origin, gender, age, or disabling condition.
(d)
(1) Are clearly explained and appropriate to the project;
(2) Will determine how successful the project is in meeting its intended outcomes, including an assessment of the effectiveness of the project in improving life skills of prisoners. To the extent feasible, the assessment must include a one-year post-release review, during the grant period, to measure the success of the project with respect to those prisoners who received services and were released. The assessment must involve comparison of the project to other existing education and training programs or no treatment for individuals, as appropriate. The evaluation must be designed to produce findings that, if positive and significant, can be used in submission of an application to the Department's Program Effectiveness Panel. To assess program effectiveness, consideration may be given to implementing a random assignment evaluation design. (Review criteria for the Progam Effectiveness Panel are provided in 34 CFR 786.12.);
(3) Provide for an assessment of the efficiency of the program's replication efforts, including dissemination activities and technical assistance provided to other projects;
(4) Include formative evaluation activities to help assess program management and improve program operations; and
(5) To the extent possible, are objective and produce data that are quantifiable.
(e)
(1) High quality in the design of the demonstration and dissemination plan;
(2) Identification of target groups and provisions for publicizing the project at the local, State, and national levels by conducting or delivering presentations at conferences, workshops, and other professional meetings and by preparing materials for journal articles, newsletters, and brochures;
(3) Provisions for demonstrating the methods and techniques used by the project to others interested in replicating these methods and techniques, such as by inviting them to observe project activities;
(4) A description of the types of materials the applicant plans to make available to help others replicate project activities and the methods for making the materials available; and
(5) Provisions for assisting others to adopt and successfully implement the project or methods and techniques used by the project.
(f)
(i) The qualifications, in relation to the objectives and planned outcomes of the project, of the project director;
(ii) The qualifications, in relation to the objectives and planned outcomes of the project, of each of the other key personnel to be used in the project, including any third-party evaluator;
(iii) The time that each person referred to in paragraphs (f)(1) (i) and (ii) of this section will commit to the project; and
(iv) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected for employment without regard to race, color, national origin, gender, age, or disabling condition.
(2) To determine personnel qualifications under paragraphs (f)(1) (i) and (ii) of this section, the Secretary considers experience and training in project
(g)
(1) Is cost effective and adequate to support the project activities;
(2) Contains costs that are reasonable and necessary in relation to the objectives of the project; and
(3) Proposes using non-Federal resources available from appropriate employment, training, and education agencies in the State to provide project services and activities and to acquire project equipment and facilities.
(h)
(1) The Secretary reviews each application to determine the extent to which the applicant plans to devote adequate resources to the project. The Secretary considers the extent to which—
(i) Facilities that the applicant plans to use are adequate; and
(ii) Equipment and supplies that the applicant plans to use are adequate.
(2) The Secretary reviews each application to determine the applicant's commitment to the project, including the extent to which—
(i) Non-Federal resources are adequate to provide project services and activities, especially resources of the public and private sectors; and
(ii) The applicant has the capacity to continue, expand, and build upon the project when Federal assistance ends.
In addition to the points awarded under the selection criteria in § 490.21, the Secretary awards up to 5 points to applications for projects that have the greatest potential for innovation, effectiveness, and replication in other systems, jails, and detention centers.
42 U.S.C. 11421, unless otherwise noted.
The Adult Education for the Homeless Program provides financial assistance to State educational agencies (SEAs) to enable them to implement, either directly or through contracts or subgrants, a program of literacy training and basic skills remediation for adult homeless individuals within their State.
State educational agencies in the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands may apply for an award under this program.
The Secretary provides grants or cooperative agreements for projects that implement a program of literacy training and basic skills remediation for adult homeless individuals. Projects must—
(a) Include a program of outreach activities; and
(b) Coordinate with existing resources such as community-based organizations, VISTA recipients, the adult basic education program and its recipients, and nonprofit literacy-action organizations.
The following regulations apply to the Adult Education for the Homeless Program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, Nonprofit Organizations) for grants, including cooperative agreements, to institutions of higher education, hospitals, and nonprofit organizations.
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 80 (Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments) for grants, including cooperative agreements, to State and local governments, including Indian tribal governments.
(6) 34 CFR part 81 (General Education Provisions Act—Enforcement).
(7) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(b) The regulations in this part 491.
(a)
Homeless or homeless individual.
State.
(b)
(c)
(1) Identify and inform adult homeless individuals of the availability and
(2) Assist those homeless adults, by providing active recruitment and reasonable and convenient access, to participate in the program.
(a) The Secretary evaluates an application on the basis of the criteria in § 491.21.
(b) The Secretary awards up to 100 points, including a reserved 15 points to be distributed in accordance with paragraph (d) of this section, based on the criteria in § 491.21.
(c) Subject to paragraph (d) of this section, the maximum possible score for each criterion is indicated in parentheses.
(d) For each competition as announced through a notice published in the
The Secretary uses the following criteria to evaluate an application:
(a)
(1) The program design is tailored to the literacy and basic skills needs of the specific homeless population being served (for example, designs to address the particular needs of single parent heads of households, substance abusers, or the chronically mentally ill);
(2) Cooperative relationships with other service agencies will provide an integrated package of support services to address the most pressing needs of the target group at, or through, the project site. Support services must be designed to bring members of the target group to a state of readiness for instructional services or to enhance the effectiveness of instructional services. Examples of appropriate support services to be provided and funded through cooperative relationships include, but are not limited to—
(i) Assistance with food and shelter;
(ii) Alcohol and drug abuse counseling;
(iii) Individual and group mental health counseling;
(iv) Health care;
(v) Child care;
(vi) Case management;
(vii) Job skills training;
(viii) Employment training and work experience programs; and
(ix) Job placement;
(3) The SEA's application provides for individualized instruction, especially the use of individualized instructional plans or individual education plans that are developed jointly by the student and the teacher and reflect student goals;
(4) The program's activities include outreach services, especially interpersonal contacts at locations where homeless persons are known to gather, and outreach efforts through cooperative relations with local agencies that provide services to the homeless; and
(5) Instructional services will be readily accessible to students, especially the provision of instructional services at a shelter or transitional housing site.
(b)
(1)(i) An estimate of the number of homeless persons expected to be served.
(ii) For the purposes of the count in paragraph (b)(1)(i) of this section, an eligible homeless adult is an individual who has attained 16 years of age or who is beyond the age of compulsory attendance under the applicable State law; who does not have a high school diploma, a GED, or the basic education skills to obtain full-time meaningful employment; and who meets the definition of “homeless or homeless individual” in section 103 of the Act;
(2) How the numbers in paragraph (b)(1) of this section were determined;
(3) The extent to which the target population of homeless to be served in
(4) The need of that population for educational services, including their readiness for instructional services and how readiness was assessed; and
(5) How the project would meet the literacy and basic skills needs of the specific target group to be served.
(c)
(1) The establishment of written, measurable goals and objectives for the project that are based on the project's overall mission;
(2) The extent to which the program is coordinated with existing resources such as community-based organizations, VISTA recipients, adult basic education program recipients, nonprofit literacy action organizations, and existing organizations providing shelters to the homeless;
(3) The extent to which the management plan is effective and ensures proper and efficient administration of the project;
(4) How the applicant will ensure that project participants otherwise eligible to participate are selected without regard to race, color, national origin, gender, age, or handicapping condition; and
(5) If applicable, the plan for the local application process and the criteria for evaluating local applications submitted by eligible applicants for contracts or subgrants.
(d)
(i) The qualifications of the State coordinator/project director;
(ii) The qualifications of each of the other key personnel to be used by the SEA in the project;
(iii) The time that each person referred to in paragraphs (d) (1) (i) and (ii) of this section will commit to the project; and
(iv) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected for employment without regard to race, color, national origin, gender, age, or handicapping condition.
(2) To determine personnel qualifications under paragraphs (d)(1) (i) and (ii) of this section, the Secretary considers—
(i) Experience and training in fields related to the objectives of the project;
(ii) Experience in providing services to homeless populations;
(iii) Experience and training in project management; and
(iv) Any other qualifications that pertain to the quality of the project.
(e)
(1) The budget is adequate to support the project;
(2) Costs are reasonable in relation to the objectives of the project; and
(3) The budget is presented in enough detail for determining paragraphs (e) (1) and (2) of this section.
(f)
(1) Objectively, and to the extent possible, quantifiably measure the success, both of the program and of the participants, in achieving established goals and objectives;
(2) Contain provisions that allow for frequent feedback from evaluation data provided by participants, teachers, and community groups in order to improve the effectiveness of the program; and
(3) Include a description of the types of instructional materials the applicant plans to make available and the methods for making the materials available.
In addition to the criteria in § 491.21, the Secretary may consider whether funding a particular applicant would
An SEA may operate the program directly, award subgrants, or award contracts to eligible recipients. If an SEA awards contracts, the SEA shall distribute funds on the basis of the State-approved contracting process.
20 U.S.C. 7475, unless otherwise noted.
The Bilingual Education: Graduate Fellowship Program provides financial assistance, through institutions of higher education (IHEs), to individuals who are pursuing master's, doctoral, or post-doctoral study related to instruction of limited English proficient (LEP) children and youth in areas such as teacher training, program administration, research and evaluation, and curriculum development and for the support of dissertation research related to this study.
(a) An IHE is eligible to participate in this program.
(b) An individual who meets the eligibility requirements under § 535.41 may apply for a fellowship through an IHE participating in this program.
(a) The Secretary may authorize the following financial assistance on an annual basis to master's and doctoral program fellowship recipients:
(1) Tuition and fees—the usual costs associated with the course of study.
(2) Books—up to $300.
(3) Travel—up to $250 for travel directly related to the program of study.
(4) A stipend of up to $500 per month, including allowances for subsistence and other expenses, for a participant and his or her dependents, if the participant is—
(i) A full-time student in a program of study that was in the approved application; and
(ii) Gainfully employed no more than 20 hours a week or the annual equivalent of 1040 hours.
(b) The Secretary may authorize the following financial assistance on an annual basis to post-doctoral fellowship recipients:
(1) A stipend of up to $40,000.
(2) Publications, research and scholarly materials, research-related travel, and fees—up to $5,000.
(c) In authorizing assistance to fellowship recipients under paragraphs (a) and (b) of this section, the Secretary considers the amount of other financial compensation that the fellowship recipients receive during the training period.
The following regulations apply to this program:
(a) 34 CFR 75.51 and 75.60 through 62.
(b) 34 CFR part 77.
(c) 34 CFR part 79.
(d) 34 CFR part 85.
(e) The regulations in this part 535.
(a)
(2) The following terms used in this part are defined in section 7104 of the Act:
(3) The following terms used in this part are defined in section 14101 of the Act:
(b)
(c) Other definition. The following definition also applies to this part:
To apply for participation under this part, an IHE shall submit an application to the Secretary that—
(a) Responds to the appropriate selection criteria in §§ 535.21 and 535.23; and
(b) Requests a specific number of fellowships to be awarded in each proposed language or other curriculum group for the fellowship period specified in § 535.42.
An application that proposes to train master's or doctoral level students with funds received under this part must provide an assurance that the program will include a training practicum in a local school program serving LEP students.
An IHE participating under this program may waive the requirement in § 535.11 for a training practicum for a master's or doctoral degree candidate who has had at least one academic year of experience in a local school program serving LEP students.
(a) The Secretary evaluates an application to participate in this program for master's and doctoral level fellowships on the basis of the criteria in § 535.21.
(b) The Secretary awards up to 100 points for these criteria.
(c) The maximum possible score for each criterion is indicated in parentheses.
(d) After all the applications have been evaluated under § 535.21, the Secretary rank-orders the applications.
(e) The Secretary then determines the maximum number of fellowships by language or other curriculum group that may be awarded at each IHE—
(1) Based on the IHE's capacity to provide graduate training in the areas proposed for fellowship recipients; and
(2) To the extent feasible, in proportion to the need for individuals with master's and doctoral degrees in the areas of training proposed by the IHE.
The Secretary uses the following selection criteria to evaluate an application for participation in this program for master's and doctoral level fellowships:
(a)
(1) The extent to which the program has been adopted as a permanent graduate program of study;
(2) The organizational placement of the program of study;
(3) The staff and resources that the IHE has committed to the program;
(4) The IHE's demonstrated competence and experience in programs and activities such as those authorized under the Act;
(5) The IHE's demonstrated experience in assisting fellowship recipients to find employment in the field of bilingual education; and
(6) If the IHE has carried out a previous project with funds under title VII of the Act, the applicant's record of accomplishments under that previous project.
(b)
(1) The course offerings and academic requirements for the graduate program;
(2) The availability of related course offerings through other schools or departments within the IHE;
(3) The IHE's focus and capacity for research;
(4) The quality of the standards used to determine satisfactory progress in, and completion of, the program;
(5) The extent to which the program of study prepares Fellows to improve the academic achievement of LEP children and youth; and
(6) In the case of a program designed to prepare trainers of educational personnel for programs of bilingual instruction, the extent to which the program incorporates the use of English and another language to develop the Fellows’ competencies as trainers of bilingual educational personnel.
(c)
(d)
(e)
(f)
(a) The Secretary evaluates an application to participate in this program for post-doctoral study fellowships on the basis of the criteria in § 535.23.
(b) The Secretary awards up to 100 points for these criteria.
(c) The maximum possible score for each criterion is indicated in parentheses.
(d) After all the applications have been evaluated according to the selection criteria, the Secretary rank-orders the applications.
(e) The Secretary designates the maximum number of fellowships that may be awarded at each IHE based on the factors in § 535.23 (a), (c), and (d).
The Secretary uses the following selection criteria to evaluate an application for participation in this program for post-doctoral level fellowships:
(a)
(1) The IHE's demonstrated competence and experience in programs and research activities such as those authorized under subpart 2 of part A of title VII of the Act;
(2) The extent to which the IHE's research environment is supportive of the success of post-doctoral Fellows in their research;
(3) The IHE's demonstrated experience in assisting fellowship recipients to find employment in the field of bilingual education;
(4) The IHE's procedures for the dissemination and use of research findings; and
(5) If the IHE has carried out a previous project with funds under title VII of the Act, the applicant's record of accomplishments under that previous project.
(b)
(1) There is a clear description of the areas of research proposed to be undertaken by the post-doctoral Fellows;
(2) The research to be undertaken by the post-doctoral Fellows is likely to produce new and useful information;
(3) The areas of proposed research relate to the educational needs of LEP children and youth and of the educational personnel that serve that population;
(4) The outcomes of the research and study are likely to benefit the defined target population by improving the academic achievement of LEP children and youth;
(5) The data collection and data analysis plans or research plans and designs are reasonable and sound; and
(6) A project period for completion of the study, consistent with period of availability of post-doctoral fellowships in § 535.42, is specified.
(c)
(d)
(1) The facilities planned for use are adequate;
(2) The equipment and supplies planned for use are adequate; and
(3) The commitment of the applicant to provide administrative and other necessary support is evident.
(a) An individual shall submit an application for a fellowship to an IHE that has been approved for participation under § 535.20 or § 535.22.
(b) Each participating IHE may establish procedures for receipt of applications from individuals.
(a)(1) A participating IHE shall submit names of nominees to the Secretary.
(2) If the IHE has more than one nominee, the IHE shall rank the nominees in order of preference to receive a fellowship.
(b) The Secretary selects new Fellows according to the rank order prepared by the IHE, subject to the maximum number of fellowships designated for that IHE under §§ 535.20 and 535.22.
(a) In nominating individuals to receive master's and doctoral level fellowships, an IHE shall nominate only individuals who—
(1) Have been accepted for enrollment as full-time students in an approved course of study offered by the IHE;
(2) Have an excellent academic record;
(3) Are proficient in English and, if applicable, another language;
(4) Have experience in providing services to, teaching in, or administering programs for LEP children and youth;
(5) Are planning to enter or return to a career in service to LEP children and youth after completion of their studies;
(6) Are eligible to receive assistance under 34 CFR 75.60 and 75.61; and
(7)(i) Are citizens, nationals, or permanent residents of the United States;
(ii) Are in the United States for other than temporary purposes and can provide evidence from the Immigration and Naturalization Service of their intent to become permanent residents; or
(iii) Are permanent residents of the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau.
(b) In nominating individuals to receive post-doctoral fellowships, an IHE shall nominate only individuals who—
(1) Have doctoral degrees in relevant disciplines that qualify those individuals to conduct independent research on educational programs and policies for LEP children and youth; and
(2) Meet the criteria in paragraphs (a)(3) through (7) of this section.
(a) Except as provided in paragraph (b) of this section, the Secretary may award a fellowship—
(1) For a maximum of two one-year periods to an individual who maintains satisfactory progress in a master's or post-doctoral program of study; and
(2) For a maximum of three one-year periods to an individual who maintains satisfactory progress in a doctoral program of study.
(b) Subject to the availability of funds, and if an IHE provides adequate justification, the Secretary may extend a fellowship beyond the maximum period to a master's or doctoral Fellow who, for circumstances beyond the Fellow's control, is unable to complete the program of study in that period.
(c) A fellowship recipient who seeks assistance beyond the initial one-year
(d) Prior to approving nominations of new Fellows, the Secretary may give preference to fellowship recipients in their second or third year who maintain satisfactory progress in the program of study.
(a) Upon selection for a fellowship, a Fellow shall sign an agreement, provided by the Secretary, to work for a period equivalent to the period of time that the Fellow receives assistance under the fellowship in an activity—
(1) (i) Related to the program; or
(ii) Authorized under part A of title VII of the Act; and
(2) Approved by the Secretary.
(b) A fellowship recipient shall begin working in an activity specified in paragraph (a) of this section within six months of the date from which—
(1) The master's or doctoral recipient ceases to be enrolled at an IHE as a full-time student; or
(2) The post-doctoral recipient completes the project period in the approved program of study.
(a) A fellowship recipient who does not work in an activity described in § 535.50 shall repay the full amount of the fellowship.
(b) The Secretary prorates the amount a fellowship recipient is required to repay based on the length of time the fellowship recipient worked in an authorized activity compared with the length of time the fellowship recipient received assistance.
(a) A fellowship recipient required to repay all or part of the amount of the fellowship shall begin repayments—
(1) Within six months of the date the fellowship recipient meets the criteria in § 535.50(b)(1) or (2); or
(2) On a date and in a manner established by the Secretary, if the fellowship recipient ceases to work in an authorized activity.
(b) A fellowship recipient must repay the required amount, including interest, in a lump sum or installment payments approved by the Secretary.
(c) The repayment period may be extended if the Secretary grants a deferment under § 535.54.
(a) In accordance with 31 U.S.C. 3717, the Secretary charges a fellowship recipient interest on the unpaid balance that the fellowship recipient owes.
(b) No interest is charged for the period of time—
(1) That precedes the date on which the fellowship recipient is required to begin repayment; or
(2) During which repayment has been deferred under § 535.54.
The Secretary may defer repayment if the fellowship recipient—
(a) Suffers from a serious physical or mental disability that prevents or substantially impairs the fellowship recipient's employability in an activity described in § 535.50;
(b) Demonstrates to the Secretary's satisfaction that the fellowship recipient is conscientiously seeking but is unable to secure employment in an activity described in § 535.50;
(c) In the case of a master's or doctoral fellowship recipient, re-enrolls as a full-time student at an IHE;
(d) Is a member of the Armed Forces of the United States on active duty;
(e) Is in service as a volunteer under the Peace Corps Act; or
(f) Demonstrates to the Secretary's satisfaction that the existence of extraordinary circumstances prevents the fellowship recipient from making a scheduled payment.
(a) Unless the Secretary determines otherwise, a fellowship recipient shall apply to renew a deferment on a yearly basis.
(b) Deferments for military or Peace Corps service may not exceed three years.
The Secretary may waive repayment if the fellowship recipient demonstrates the existence of extraordinary circumstances that justify a waiver.
(a) Within six months of the date a fellowship recipient meets the criteria in § 535.50(b)(1) or (2), the fellowship recipient shall submit to the Secretary one of the following items:
(1) A description of the activity in which the fellowship recipient is employed.
(2) Repayment required under §§ 535.51 and 535.52.
(3) A request to repay the obligation in installments.
(4) A request for a deferment or waiver as described in §§ 535.54 and 535.56 accompanied by a statetment of justification.
(b) A fellowship recipient who submits a description of employment under paragraph (a)(1) of this section shall notify the Secretary on a yearly basis of the period of time during the preceding year that the fellowship recipient was employed in the activity.
(c) A fellowship recipient shall inform the Secretary of any change in employment status.
(d) A fellowship recipient shall inform the Secretary of any change of address.
(e)(1) A fellowship recipient's failure to timely satisfy the requirements in paragraphs (b) through (d) of this section results in the fellowship recipient being in non-compliance or default status subject to collection action.
(2) Interest and costs of collection may be collected in accordance with 31 U.S.C. 3717 and 34 CFR part 30.
20 U.S.C. 1001, 1002, 1003, 1088, 1091, 1094, 1099b, and 1099c, unless otherwise noted.
This part establishes the rules and procedures that the Secretary uses to determine whether an educational institution qualifies in whole or in part as an eligible institution of higher education under the Higher Education Act of 1965, as amended (HEA). An eligible institution of higher education may apply to participate in programs authorized by the HEA (HEA programs).
The following definitions apply to terms used in this part:
(1) Is permanent in nature;
(2) Offers courses in educational programs leading to a degree, certificate, or other recognized educational credential;
(3) Has its own faculty and administrative or supervisory organization; and
(4) Has its own budgetary and hiring authority.
(1) A 50- to 60-minute class, lecture, or recitation in a 60-minute period;
(2) A 50- to 60-minute faculty-supervised laboratory, shop training, or internship in a 60-minute period; or
(3) Sixty minutes of preparation in a correspondence course.
(2) A home study course that provides instruction in whole or in part through the use of video cassettes or video discs in an award year is a correspondence course unless the institution also delivers the instruction on the cassette or disc to students physically attending classes at the institution during the same award year.
(3) A course at an institution that may otherwise satisfy the definition of a “telecommunications course” is a correspondence course if the sum of telecommunications and other correspondence courses offered by that institution equals or exceeds 50 percent of the total courses offered at that institution.
(4) If a course is part correspondence and part residential training, the Secretary considers the course to be a correspondence course.
(1) Qualifies as—
(i) An institution of higher education, as defined in § 600.4;
(ii) A proprietary institution of higher education, as defined in § 600.5; or
(iii) A postsecondary vocational institution, as defined in § 600.6; and
(2) Meets all the other applicable provisions of this part.
(1) Is owned and operated by one or more nonprofit corporations or associations, no part of the net earnings of
(2) Is legally authorized to operate as a nonprofit organization by each State in which it is physically located; and
(3) Is determined by the U.S. Internal Revenue Service to be an organization to which contributions are tax-deductible in accordance with section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)).
(1) A General Education Development Certificate (GED);
(2) A State certificate received by a student after the student has passed a State-authorized examination that the State recognizes as the equivalent of a high school diploma;
(3) An academic transcript of a student who has successfully completed at least a two-year program that is acceptable for full credit toward a bachelor's degree; or
(4) For a person who is seeking enrollment in an educational program that leads to at least an associate degree or its equivalent and who has not completed high school but who excelled academically in high school, documentation that the student excelled academically in high school and has met the formalized, written policies of the institution for admitting such students.
(1) Listed in an “occupational division” of the latest edition of the
(2) Determined by the Secretary in consultation with the Secretary of Labor to be a recognized occupation.
(a) An institution of higher education is a public or private nonprofit educational institution that—
(1) Is in a State, or for purposes of the Federal Pell Grant, Federal Supplemental Educational Opportunity
(2) Admits as regular students only persons who—
(i) Have a high school diploma;
(ii) Have the recognized equivalent of a high school diploma; or
(iii) Are beyond the age of compulsory school attendance in the State in which the institution is physically located;
(3) Is legally authorized to provide an educational program beyond secondary education in the State in which the institution is physically located;
(4) Provides an educational program—
(i) For which it awards an associate, baccalaureate, graduate, or professional degree;
(ii) That is at least a two-academic-year program acceptable for full credit toward a baccalaureate degree; or
(iii) That is at least a one-academic-year training program that leads to a certificate, degree, or other recognized educational credential and prepares students for gainful employment in a recognized occupation; and
(5) Is—
(i) Accredited or preaccredited; or
(ii) Approved by a State agency listed in the
(b) An institution is physically located in a State if it has a campus or other instructional site in that State.
(c) The Secretary does not recognize the accreditation or preaccreditation of an institution unless the institution agrees to submit any dispute involving the final denial, withdrawal, or termination of accreditation to initial arbitration before initiating any other legal action.
(a) A proprietary institution of higher education is an educational institution that—
(1) Is not a public or private nonprofit educational institution;
(2) Is in a State;
(3) Admits as regular students only persons who—
(i) Have a high school diploma;
(ii) Have the recognized equivalent of a high school diploma; or
(iii) Are beyond the age of compulsory school attendance in the State in which the institution is physically located;
(4) Is legally authorized to provide an educational program beyond secondary education in the State in which the institution is physically located;
(5) Provides an eligible program of training, as defined in 34 CFR 668.8, to prepare students for gainful employment in a recognized occupation;
(6) Is accredited;
(7) Has been in existence for at least two years; and
(8) Has no more than 90 percent of its revenues derived from title IV, HEA program funds, as determined under paragraph (d) of this section.
(b)(1) The Secretary considers an institution to have been in existence for two years only if—
(i) The institution has been legally authorized to provide, and has provided, a continuous educational program to prepare students for gainful employment in a recognized occupation during the 24 months preceding the date of its eligibility application; and
(ii) The educational program that the institution provides on the date of its eligibility application is substantially the same in length and subject matter as the program that the institution provided during the 24 months preceding the date of its eligibility application.
(2)(i) The Secretary considers an institution to have provided a continuous educational program during the 24 months preceding the date of its eligibility application even if the institution did not provide that program during normal vacation periods, or periods
(ii) The Secretary considers an institution to have satisfied the provisions of paragraph (b)(1)(ii) of this section if the institution substantially changed the subject matter of the educational program it provided during that 24-month period because of new technology or the requirements of other Federal agencies.
(3) In determining whether an applicant institution satisfies the requirement contained in paragraph (b)(1) of this section, the Secretary—
(i) Counts any period during which the applicant institution has been certified as a branch campus; and
(ii) Except as provided in paragraph (b)(3)(i) of this section, does not count any period during which the applicant institution was a part of another eligible proprietary institution of higher education, postsecondary vocational institution, or vocational school.
(c) An institution is physically located in a State if it has a campus or other instructional site in that State.
(d)(1) An institution satisfies the requirement contained in paragraph (a)(8) of this section by examining its revenues under the following formula for its latest complete fiscal year:
(2) An institution must use the cash basis of accounting when calculating the amount of title IV, HEA program funds in the numerator and the total amount of revenue generated by the institution in the denominator of the fraction contained in paragraph (d)(1) of this section.
(3) Under the cash basis of accounting—
(i) In calculating the amount of revenue generated by the institution from institutional loans, the institution must include only the amount of loan repayments received by the institution during the fiscal year; and
(ii) In calculating the amount of revenue generated by the institution from institutional scholarships, the institution must include only the amount of funds it disbursed during the fiscal year from an established restricted account and only to the extent that the funds in that account represent designated funds from an outside source or income earned on those funds.
(e) With regard to the formula contained in paragraph(d)(1) of this section—
(1) The institution may not include as title IV, HEA program funds in the numerator nor as revenue generated by the institution in the denominator—
(i) The amount of funds it received under the Federal Work-Study (FWS) Program, unless the institution used those funds to pay a student's institutional charges in which case the FWS program funds used to pay those charges would be included in the numerator and denominator.
(ii) The amount of funds it received under the Leveraging Educational Assistance Partnership (LEAP) Program. (The LEAP Program was formerly called the State Student Incentive Grant or SSIG Program.);
(iii) The amount of institutional funds it used to match title IV, HEA program funds;
(iv) The amount of title IV, HEA program funds that must be refunded or returned under § 668.22; or
(v) The amount charged for books, supplies, and equipment unless the institution includes that amount as tuition, fees, or other institutional charges.
(2) In determining the amount of title IV, HEA program funds received by the institution under the cash basis of accounting, except as provided in paragraph (e)(3) of this section, the institution must presume that any title IV, HEA program funds disbursed or delivered to or on behalf of a student will be used to pay the student's tuition, fees, or other institutional
(3) In paragraph (e)(2) of this section, the institution may not presume that title IV, HEA program funds were used to pay tuition, fees, and other institutional charges to the extent that those charges were satisfied by—
(i) Grant funds provided by non-Federal public agencies, or private sources independent of the institution;
(ii) Funds provided under a contractual arrangement described in § 600.7(d), or
(iii) Funds provided by State prepaid tuition plans.
(4) With regard to the denominator, revenue generated by the institution from activities it conducts, that are necessary for its students’ education or training, includes only revenue from those activities that—
(i) Are conducted on campus or at a facility under the control of the institution;
(ii) Are performed under the supervision of a member of the institution's faculty; and
(iii) Are required to be performed by all students in a specific educational program at the institution.
(f) An institution must notify the Secretary within 90 days following the end of the fiscal year used in paragraph (d)(1) of this section if it fails to satisfy the requirement contained in paragraph (a)(8) of this section.
(g) If an institution loses its eligibility because it failed to satisfy the requirement contained in paragraph (a)(8) of this section, to regain its eligibility it must demonstrate compliance with all eligibility requirements for at least the fiscal year following the fiscal year used in paragraph (d)(1) of this section.
(h) The Secretary does not recognize the accreditation of an institution unless the institution agrees to submit any dispute involving the final denial, withdrawal, or termination of accreditation to initial arbitration before initiating any other legal action.
(a) A postsecondary vocational institution is a public or private nonprofit educational institution that—
(1) Is in a State;
(2) Admits as regular students only persons who—
(i) Have a high school diploma;
(ii) Have the recognized equivalent of a high school diploma; or
(iii) Are beyond the age of compulsory school attendance in the State in which the institution is physically located;
(3) Is legally authorized to provide an educational program beyond secondary education in the State in which the institution is physically located;
(4) Provides an eligible program of training, as defined in 34 CFR 668.8, to prepare students for gainful employment in a recognized occupation;
(5) Is—
(i) Accredited or preaccredited; or
(ii) Approved by a State agency listed in the
(6) Has been in existence for at least two years.
(b)(1) The Secretary considers an institution to have been in existence for two years only if—
(i) The institution has been legally authorized to provide, and has provided, a continuous education or training program to prepare students for gainful employment in a recognized occupation during the 24 months preceding the date of its eligibility application; and
(ii) The education or training program it provides on the date of its eligibility application is substantially the
(2)(i) The Secretary considers an institution to have provided a continuous education or training program during the 24 months preceding the date of its eligibility application even if the institution did not provide that program during normal vacation periods, or periods when the institution temporarily closed due to a natural disaster that affected the institution or the institution's students.
(ii) The Secretary considers an institution to have satisfied the provisions of paragraph (b)(1)(ii) of this section if the institution substantially changed the subject matter of the educational program it provided during that 24-month period because of new technology or the requirements of other Federal agencies.
(3) In determining whether an applicant institution satisfies the requirement contained in paragraph (b)(1) of this section, the Secretary—
(i) Counts any period during which the applicant institution qualified as an eligible institution of higher education;
(ii) Counts any period during which the applicant institution was part of another eligible institution of higher education, provided that the applicant institution continues to be part of an eligible institution of higher education;
(iii) Counts any period during which the applicant institution has been certified as a branch campus; and
(iv) Except as provided in paragraph (b)(3)(iii) of this section, does not count any period during which the applicant institution was a part of another eligible proprietary institution of higher education or postsecondary vocational institution.
(c) An institution is physically located in a State or other instructional site if it has a campus or instructional site in that State.
(d) The Secretary does not recognize the accreditation or preaccreditation of an institution unless the institution agrees to submit any dispute involving the final denial, withdrawal, or termination of accreditation to initial arbitration before initiating any other legal action.
(a)
(1) For its latest complete award year—
(i) More than 50 percent of the institution's courses were correspondence courses as calculated under paragraph (b) of this section;
(ii) Fifty percent or more of the institution's regular enrolled students were enrolled in correspondence courses;
(iii) More than twenty-five percent of the institution's regular enrolled students were incarcerated;
(iv) More than fifty percent of its regular enrolled students had neither a high school diploma nor the recognized equivalent of a high school diploma, and the institution does not provide a four-year or two-year educational program for which it awards a bachelor's degree or an associate degree, respectively;
(2) The institution, or an affiliate of the institution that has the power, by contract or ownership interest, to direct or cause the direction of the management of policies of the institution—
(A) Files for relief in bankruptcy, or
(B) Has entered against it an order for relief in bankruptcy; or
(3) The institution, its owner, or its chief executive officer—
(i) Has pled guilty to, has pled
(ii) Has been judicially determined to have committed fraud involving title IV, HEA program funds.
(b)
(2)
(i) A correspondence course may be a complete educational program offered by correspondence, or one course provided by correspondence in an on-campus (residential) educational program;
(ii) A course must be considered as being offered once during an award year regardless of the number of times it is offered during that year; and
(iii) A course that is offered both on campus and by correspondence must be considered two courses for the purpose of determining the total number of courses the institution provided during an award year.
(3)
(ii) The Secretary waives the limitation contained in paragraph (a)(1)(ii) of this section for an institution that offers a 2-year associate-degree or a 4-year bachelor's-degree program if the students enrolled in the institution's correspondence courses receive no more than 5 percent of the title IV, HEA program funds received by students at that institution.
(c)
(2)
(3)
(i) For the four-year and two-year programs for which it awards a bachelor's degree, an associate degree or a postsecondary diploma; and
(ii) For the other programs the institution provides, if the incarcerated regular students enrolled in those other programs have a completion rate of 50 percent or greater.
(d)
(2)
(i) Do not have a high school diploma or its equivalent; and
(ii) Are not served through contracts described in paragraph (d)(3) of this section.
(3)
(e)
(i) Count each regular student without regard to the full-time or part-time nature of the student's attendance (i.e., “head count” rather than “full-time equivalent”);
(ii) Count a regular student once regardless of the number of times the student enrolls during an award year; and
(iii) Determine the number of regular students who enrolled in the institution during the relevant award year by—
(A) Calculating the number of regular students who enrolled during that award year; and
(B) Excluding from the number of students in paragraph (e)(1)(iii)(A) of this section, the number of regular students who enrolled but subsequently withdrew or were expelled from the institution and were entitled to receive a 100 percent refund of their tuition and fees less any administrative fee that the institution is permitted to keep under its fair and equitable refund policy.
(2) For the purpose of calculating a completion rate under paragraph (c)(3)(ii) of this section, the institution shall—
(i) Determine the number of regular incarcerated students who enrolled in the other programs during the last completed award year;
(ii) Exclude from the number of regular incarcerated students determined in paragraph (e)(2)(i) of this section, the number of those students who enrolled but subsequently withdrew or were expelled from the institution and were entitled to receive a 100 percent refund of their tuition and fees, less any administrative fee the institution is permitted to keep under the institution's fair and equitable refund policy;
(iii) Exclude from the total obtained in paragraph (e)(2)(ii) of this section, the number of those regular incarcerated students who remained enrolled in the programs at the end of the applicable award year;
(iv) From the total obtained in paragraph (e)(2)(iii) of this section, determine the number of regular incarcerated students who received a degree, certificate, or other recognized educational credential awarded for successfully completing the program during the applicable award year; and
(v) Divide the total obtained in paragraph (e)(2)(iv) of this section by the total obtained in paragraph (e)(2)(iii) of this section and multiply by 100.
(f)(1) If the Secretary grants a waiver to an institution under this section, the waiver extends indefinitely provided that the institution satisfies the waiver requirements in each award year.
(2) If an institution fails to satisfy the waiver requirements for an award year, the institution becomes ineligible on June 30 of that award year.
(g)(1) For purposes of paragraph (a)(1) of this section, and any applicable waiver or exception under this section, the institution shall substantiate the required calculations by having the certified public accountant who prepares its audited financial statement under 34 CFR 668.15 or its title IV, HEA program compliance audit under 34 CFR 668.23 report on the accuracy of those determinations.
(2) The certified public accountant's report must be based on performing an “attestation engagement” in accordance with the American Institute of Certified Public Accountants (AICPA's) Statement on Standards for Attestation Engagements. The certified public accountant shall include that attestation report with or as part of the audit report referenced in paragraph (g)(1) of this section.
(3) The certified public accountant's attestation report must indicate whether the institution's determinations regarding paragraph (a)(1) of this section and any relevant waiver or exception under paragraphs (b), (c), and
(h)
(1) By July 31 following the end of an award year if it falls within one of the prohibitions contained in paragraph (a)(1)of this section, or fails to continue to satisfy a waiver or exception granted under this section; or
(2) Within 10 days if it falls within one of the prohibitions contained in paragraphs (a)(2) or (a)(3) of this section.
(i)
(i) Compliance with all eligibility requirements;
(ii) That it did not fall within any of the prohibitions contained in paragraph (a)(1) of this section for at least one award year; and
(iii) That it changed its administrative policies and practices to ensure that it will not fall within any of the prohibitions contained in paragraph (a)(1) of this section.
(2) If an institution loses its eligibility because of one of the prohibitions contained in paragraphs (a)(2) and (a)(3) of this section, this loss is permanent. The institution's eligibility cannot be reinstated.
A branch campus of an eligible proprietary institution of higher education or a postsecondary vocational institution must be in existence for at least two years as a branch campus after the branch is certified as a branch campus before seeking to be designated as a main campus or a free-standing institution.
(a)
(i) The Secretary signs the institution's program participation agreement described in 34 CFR part 668, subpart B, for purposes of participating in any title IV, HEA program; and
(ii) The Secretary receives all the information necessary to make that determination for purposes other than participating in any title IV, HEA program.
(2) [Reserved]
(b)
(2) If the Secretary determines that only certain educational programs or certain locations of an applicant institution satisfy the applicable requirements of this part, the Secretary extends eligibility only to those educational programs and locations that meet those requirements and identifies the eligible educational programs and locations in the eligibility notice sent to the institution under § 600.21.
(3) Eligibility does not extend to any location that an institution establishes after it receives its eligibility designation if the institution provides at least 50 percent of an educational program at that location, unless—
(i) The Secretary approves that location under § 600.20(e)(4); or
(ii) The location is licensed and accredited, the institution does not have to apply to the Secretary for approval of that location under § 600.20(c), and the institution has reported to the Secretary that location under § 600.21.
(c)
(2) An eligible institution that adds an educational program after it has been designated as an eligible institution by the Secretary does not have to apply to the Secretary to have that additional program designated as an eligible program of that institution if the additional program—
(i) Leads to an associate, baccalaureate, professional, or graduate degree; or
(ii)(A) Prepares students for gainful employment in the same or related recognized occupation as an educational program that has previously been designated as an eligible program at that institution by the Secretary; and
(B) Is at least 8 semester hours, 12 quarter hours, or 600 clock hours.
(3) If an institution incorrectly determines under paragraph (c)(2) of this section that an educational program satisfies the applicable statutory and regulatory eligibility provisions without applying to the Secretary for approval, the institution is liable to repay to the Secretary all HEA program funds received by the institution for that educational program, and all the title IV, HEA program funds received by or on behalf of students who were enrolled in that educational program.
(d)
(2) If an institution participates in an HEA program other than a title IV, HEA program, the Secretary's designation of the institution as an eligible institution, for purposes of that non-title IV, HEA program, does not expire as long as the institution continues to satisfy the statutory and regulatory requirements governing its eligibility.
(e)
(2) If, as part of its institutional eligibility application, an institution indicates that it does not wish to participate in any title IV, HEA program and the Secretary determines that the institution satisfies the applicable statutory and regulatory requirements governing institutional eligibility, the institution is eligible to apply to participate in any HEA program listed by the Secretary in the eligibility notice it receives under § 600.21. However, the institution is not eligible to participate in those programs, or receive funds under those programs, merely by virtue of its designation as an eligible institution under this part.
(a)
(1) All materials related to its prior accreditation or preaccreditation; and
(2) Materials demonstrating reasonable cause for changing its accrediting agency.
(b)
(1) Provides to each such accrediting agency and the Secretary the reasons for that multiple accreditation or preaccreditation;
(2) Demonstrates to the Secretary reasonable cause for that multiple accreditation or preaccreditation; and
(3) Designates to the Secretary which agency's accreditation or preaccreditation the institution uses to establish its eligibility under this part.
(c)
(2) An institution may not be considered eligible for 24 months after it has withdrawn voluntarily from its accreditation or preaccreditation status under a show-cause or suspension order issued by an accrediting agency, unless that agency rescinds its order.
(d)
(i) Is related to the religious mission or affiliation of the institution; and
(ii) Is not related to its failure to satisfy the accrediting agency's standards.
(2) If the Secretary considers an unaccredited institution to be accredited or preaccredited under the provisions of paragraph (d)(1) of this section, the Secretary will consider that unaccredited institution to be accredited or preaccredited for a period sufficient to allow the institution to obtain alternative accreditation or preaccreditation, except that period may not exceed 18 months.
(a)
(b)
(2) A currently designated eligible institution that participates in the title IV, HEA programs must apply to the Secretary for a determination that the institution continues to meet the requirements in this part and in 34 CFR part 668 if the institution wishes to—
(i) Continue to participate in the title IV, HEA programs beyond the
(ii) Reestablish eligibility and certification as a private nonprofit, private for-profit, or public institution following a change in ownership that results in a change in control as described in § 600.31; or
(iii) Reestablish eligibility and certification after the institution changes its status as a proprietary, nonprofit, or public institution.
(c)
(1) Add a location at which the institution offers or will offer 50 percent or more of an educational program if one of the following conditions applies, otherwise it must report to the Secretary under § 600.21:
(i) The institution participates in the title IV, HEA programs under a provisional certification, as provided in 34 CFR 668.13.
(ii) The institution receives title IV, HEA program funds under the reimbursement or cash monitoring payment method, as provided in 34 CFR part 668, subpart K.
(iii) The institution acquires the assets of another institution that provided educational programs at that location during the preceding year and participated in the title IV, HEA programs during that year.
(iv) The institution would be subject to a loss of eligibility under 34 CFR 668.188 if it adds that location.
(v) The Secretary previously notified the institution that it must apply for approval of an additional location.
(2) Increase its level of program offering (
(3) Add an educational program if the institution is required to apply to the Secretary for approval under § 600.10(c);
(4) Add a branch campus at a location that is not currently included in the institution's eligibility and certification designation; or
(5) Convert an eligible location to a branch campus.
(d)
(e)
(i) Whether the applicant institution qualifies in whole or in part as an eligible institution under the appropriate provisions in §§ 600.4 through 600.7; and
(ii) Of the locations and educational programs that qualify as the eligible institution if only a portion of the applicant qualifies as an eligible institution;
(2) If the Secretary receives an application under paragraphs (a) or (b) of this section and that institution applies to participate in the title IV, HEA programs, the Secretary notifies the institution—
(i) Whether the institution is certified to participate in those programs;
(ii) Of the title IV, HEA programs in which it is eligible to participate;
(iii) Of the title IV, HEA programs in which it is eligible to apply for funds;
(iv) Of the effective date of its eligibility to participate in those programs; and
(v) Of the conditions under which it may participate in those programs;
(3) If the Secretary receives an application under paragraph (b)(2) of this section, the Secretary notifies the institution whether it continues to be certified, or whether it reestablished its eligibility and certification to participate in the title IV, HEA programs and the scope of such approval.
(4) If the Secretary receives an application under paragraph (c)(1) of this section for an additional location, the Secretary notifies the institution whether the location is eligible or ineligible to participate in the title IV, HEA programs, and the date of eligibility if the location is determined eligible;
(5) If the Secretary receives an application under paragraph (c)(2) of this section for an increase in the level of program offering, or for an additional educational program under paragraph (c)(3) of this section, the Secretary notifies the institution whether the program qualifies as an eligible program, and if the program qualifies, the date of eligibility; and
(6) If the Secretary receives an application under paragraphs (c)(4) or (c)(5) of this section to have a branch campus certified to participate in the title IV, HEA programs as a branch campus, the Secretary notifies the institution whether that branch campus is certified to participate and the date that the branch campus is eligible to begin participation.
(f)
(ii) An institution described in paragraph (f)(1)(i) of this section may disburse title IV, HEA program funds to its students if the institution submits to the Secretary a materially complete renewal application in accordance with the provisions of 34 CFR 668.13(b)(2), and has not received a final decision from the Department on that application.
(2)(i) Except as provided under paragraph (f)(2)(ii) of this section and 34 CFR 668.26, if a private nonprofit, private for-profit, or public institution submits an application under paragraph (b)(2)(ii) or (b)(2)(iii) of this section because it has undergone or will undergo a change in ownership that results in a change of control or a change in status, the institution may not disburse title IV, HEA program funds to students attending that institution after the change of ownership or status until the institution receives the Secretary's notification that the institution is eligible to participate in those programs.
(ii) An institution described in paragraph (f)(2)(i) of this section may disburse title IV, HEA program funds to its students if the Secretary issues a provisional extension of certification under paragraph (g) of this section.
(3) If an institution must apply to the Secretary under paragraphs (c)(1) through (c)(4) of this section, the institution may not disburse title IV, HEA program funds to students attending the subject location, program, or branch until the institution receives the Secretary's notification that the location, program, or branch is eligible to participate in the title IV, HEA programs.
(4) If an institution applies to the Secretary under paragraph (c)(5) of this section to convert an eligible location to a branch campus, the institution may continue to disburse title IV, HEA program funds to students attending that eligible location.
(5) If an institution does not apply to the Secretary to obtain the Secretary's approval of a new location, program, increased level of program offering, or branch, and the location, program, or branch does not qualify as an eligible location, program, or branch of that institution under this part and 34 CFR part 668, the institution is liable for all title IV, HEA program funds it disburses to students enrolled at that location or branch or in that program.
(g)
(2) For purposes of this section, a private nonprofit institution, a private for-profit institution, or a public institution submits a materially complete
(i) A copy of the institution's State license or equivalent document that—as of the day before the change in ownership—authorized or will authorize the institution to provide a program of postsecondary education in the State in which it is physically located;
(ii) A copy of the document from the institution's accrediting association that—as of the day before the change in ownership—granted or will grant the institution accreditation status, including approval of any non-degree programs it offers;
(iii) Audited financial statements of the institution's two most recently completed fiscal years that are prepared and audited in accordance with the requirements of 34 CFR 668.23; and
(iv) Audited financial statements of the institution's new owner's two most recently completed fiscal years that are prepared and audited in accordance with the requirements of 34 CFR 668.23, or equivalent information for that owner that is acceptable to the Secretary.
(h)
(2) The provisional PPA expires on the earlier of—
(i) The date on which the Secretary signs a new program participationagreement;
(ii) The date on which the Secretary notifies the institution that its application is denied; or
(iii) The last day of the month following the month in which the change of ownership occurred, unless the provisions of paragraph (h)(3) of this section apply.
(3) If the provisional PPA will expire under the provisions of paragraph (h)(2)(iii) of this section, the Secretary extends the provisional PPA on a month-to-month basis after the expiration date described in paragraph (h)(2)(iii) of this section if, prior to that expiration date, the institution provides the Secretary with—
(i) A “same day” balance sheet showing the financial position of the institution, as of the date of the ownership change, that is prepared in accordance with Generally Accepted Accounting Principles (GAAP) published by the Financial Accounting Standards Board and audited in accordance with Generally Accepted Government Auditing Standards (GAGAS) published by the U.S. General Accounting Office;
(ii) If not already provided, approval of the change of ownership from the State in which the institution is located by the agency that authorizes the institution to legally provide postsecondary education in that State;
(iii) If not already provided, approval of the change of ownership from the institution's accrediting agency; and
(iv) A default management plan unless the institution is exempt from providing that plan under 34 CFR 668.14(b)(15).
(a)
(1) Its name, the name of a branch, or the name of a previously reported location.
(2) Its address, the address of a branch, or the address of a previously reported location.
(3) Its establishment of an accredited and licensed additional location at which it offers or will offer 50 percent or more of an educational program if the institution wants to disburse title IV, HEA program funds to students enrolled at that location, under the provisions in paragraph (d) of this section.
(4) The way it measures program length (
(5) A decrease in the level of program offering (
(6) A person's ability to affect substantially the actions of the institution if that person did not previously have this ability. The Secretary considers a person to have this ability if the person—
(i) Holds alone or together with another member or members of his or her family, at least a 25 percent “ownership interest” in the institution as defined in § 600.31(b);
(ii) Represents or holds, either alone or together with other persons, under a voting trust, power of attorney, proxy, or similar agreement at least a 25 percent “ownership interest” in the institution, as defined in § 600.31(b); or
(iii) Is a general partner, the chief executive officer, or chief financial officer of the institution.
(7) The individual the institution designates under 34 CFR 668.16(b)(1) as its title IV, HEA Program administrator.
(8) The closure of a branch campus or additional location that the institution was required to report to the Secretary.
(9) The governance of a public institution.
(b)
(c)
(d)
(e)
(f)
(1) Parent or stepparent, sibling or step-sibling, spouse, child or stepchild, or grandchild or step-grandchild;
(2) Spouse's parent or stepparent, sibling or step-sibling, child or stepchild, or grandchild or step-grandchild;
(3) Child's spouse; and
(4) Sibling's spouse.
(a)(1) Except as provided in paragraph (a)(2) of this section, a private nonprofit, private for-profit, or public institution that undergoes a change in ownership that results in a change in control ceases to qualify as an eligible institution upon the change in ownership and control. A change in ownership that results in a change in control includes any change by which a person who has or thereby acquires an ownership interest in the entity that owns the institution or the parent corporation of that entity, acquires or loses the ability to control the institution.
(2) If a private nonprofit, private for-profit, or public institution has undergone a change in ownership that results in a change in control, the Secretary may, under the provisions of § 600.20(g) and (h), continue the institution's participation in the title IV, HEA programs on a provisional basis, provided that the institution submits, under the provisions of § 600.20(g), a materially complete application—
(i) No later than 10 business days after the change occurs; or
(ii) For an institution owned by a publicly-traded corporation, no later than 10 business days after the institution knew, or should have known of the change based upon SEC filings, that the change occurred.
(3) In order to reestablish eligibility and to resume participation in the title IV, HEA programs, the institution must demonstrate to the Secretary that after the change in ownership and control—
(i) The institution satisfies all the applicable requirements contained in §§ 600.4, 600.5, and 600.6, except that if the institution is a proprietary institution of higher education or postsecondary vocational institution, it need not have been in existence for two years before seeking eligibility; and
(ii) The institution qualifies to be certified to participate under 34 CFR part 668, subpart B.
(b)
(1) A corporation that qualifies under the law of the State of its incorporation as a closely-held corporation; or
(2) If the State of incorporation has no definition of closely-held corporation, a corporation the stock of which—
(i) Is held by no more than 30 persons; and
(ii) Has not been and is not planned to be publicly offered.
(2) Ownership or ownership interest does not include an ownership interest held by—
(i) A mutual fund that is regularly and publicly traded;
(ii) A U.S. institutional investor, as defined in 17 CFR 240.15a-6(b)(7);
(iii) A profit-sharing plan of the institution or its corporate parent, provided that all full-time permanent employees of the institution or corporate parent are included in the plan; or
(iv) An Employee Stock Ownership Plan (ESOP).
(c)
(i) A person acquires more than 50 percent of the total outstanding voting stock of the corporation;
(ii) A person who holds an ownership interest in the corporation acquires control of more than 50 percent of the outstanding voting stock of the corporation; or
(iii) A person who holds or controls 50 percent or more of the total outstanding stock of the corporation ceases to hold or control that proportion of the stock of the corporation.
(2)
(i) A person acquires such ownership and control of the corporation so that the corporation is required to file a Form 8K with the SEC notifying that agency of the change in control; or
(ii) (A) A person who is a controlling shareholder of the corporation ceases to be a controlling shareholder. A controlling shareholder is a shareholder who holds or controls through agreement both 25 percent or more of the total outstanding voting stock of the corporation and more shares of voting stock than any other shareholder. A controlling shareholder for this purpose does not include a shareholder whose sole stock ownership is held as a U.S. institutional investor, as defined in 17 CFR 240.15a-6(b)(7), held in mutual funds, held through a profit-sharing plan, or held in an Employee Stock Ownership Plan (ESOP).
(B) When a change of ownership occurs as a result of paragraph (c)(2)(ii)(A) of this section, the institution may submit its most recent quarterly financial statement as filed with the SEC, along with copies of all other SEC filings made after the close of the fiscal year for which a compliance audit has been submitted to the Department of Education, instead of the “same day” balance sheet.
(C) If a publicly-traded institution is provisionally certified due to a change in ownership under paragraph (c)(2)(ii) of this section, and that institution experiences another change of ownership under paragraph (c)(2)(ii) of this section, an approval of the subsequent change in ownership does not extend the original expiration date for the provisional certification provided that any current controlling shareholder was listed on the change of ownership application for which the original provisional approval was granted.
(3)
(i) A person who has or acquires an ownership interest acquires both control of at least 25 percent of the total outstanding voting stock of the corporation and control of the corporation;
(ii) A person who holds both ownership or control of at least 25 percent of the total outstanding voting stock of the corporation and control of the corporation, ceases to own or control that proportion of the stock of the corporation, or to control the corporation; or
(iii) For a membership corporation, a person who is or becomes a member acquires or loses control of 25 percent of the voting interests of the corporation and control of the corporation.
(4)
(5)
(6)
(7)
(i) The new governing authority is in the same State as included in the institution's program participation agreement; and
(ii) The new governing authority has acknowledged the public institution's continued responsibilities under its program participation agreement.
(d)
(1) The sale of the institution;
(2) The transfer of the controlling interest of stock of the institution or its parent corporation;
(3) The merger of two or more eligible institutions;
(4) The division of one institution into two or more institutions;
(5) The transfer of the liabilities of an institution to its parent corporation;
(6) A transfer of assets that comprise a substantial portion of the educational business of the institution, except where the transfer consists exclusively in the granting of a security interest in those assets; or
(7) A change in status as a for-profit, nonprofit, or public institution.
(e)
(1) From an owner to a “family member” of that owner as defined in § 600.21(f); or
(2) Upon the retirement or death of the owner, to a person with an ownership interest in the institution who has been involved in management of the institution for at least two years preceding the transfer and who has established and retained the ownership interest for at least two years prior to the transfer.
(a) Except as provided in paragraphs (b) and (c) of this section, to qualify as an eligible location, an additional location of an eligible institution must satisfy the applicable requirements of this section and §§ 600.4, 600.5, 600.6, 600.8, and 600.10.
(b) To qualify as an eligible location, an additional location is not required to satisfy the two-year requirement of §§ 600.5(a)(7) or 600.6(a)(6), unless—
(1) The location was a facility of another institution that has closed or ceased to provide educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution or the institution's students;
(2) The applicant institution acquired, either directly from the institution that closed or ceased to provide educational programs, or through an intermediary, the assets at the location; and
(3) The institution from which the applicant institution acquired the assets of the location—
(i) Owes a liability for a violation of an HEA program requirement; and
(ii) Is not making payments in accordance with an agreement to repay that liability.
(c) Notwithstanding paragraph (b) of this section, an additional location is not required to satisfy the two-year requirement of § 600.5(a)(7) or § 600.6(a)(6) if the applicant institution agrees—
(1) To be liable for all improperly expended or unspent title IV, HEA program funds received by the institution that has closed or ceased to provide educational programs;
(2) To be liable for all unpaid refunds owed to students who received title IV, HEA program funds; and
(3) To abide by the policy of the institution that has closed or ceased to provide educational programs regarding refunds of institutional charges to students in effect before the date of the acquisition of the assets of the additional location for the students who were enrolled before that date.
(d) For purposes of this section, an “additional location” is a location of an institution that was not designated as an eligible location in the eligibility notification provided to an institution under § 600.21.
(a)(1) Except as provided in paragraphs (a) (2) and (3) of this section, an institution, or a location or educational program of an institution, loses its eligibility on the date that—
(i) The institution, location, or educational program fails to meet any of
(ii) The institution or location permanently closes;
(iii) The institution or location ceases to provide educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution, particular location, or the students of the institution or location; or
(iv) For purposes of the title IV, HEA programs—
(A) The institution's period of participation as specified under 34 CFR 668.13 expires; or
(B) The institution's provisional certification is revoked under 34 CFR 668.13.
(2) If an institution loses its eligibility because it violated the requirements of § 600.5(a)(8), as evidenced by the determination under provisions contained in § 600.5(d), it loses its eligibility on the last day of the fiscal year used in § 600.5(d), except that if an institution's latest fiscal year was described in § 600.7(h)(1), it loses its eligibility as of June 30, 1994.
(3) If an institution loses its eligibility under the provisions of § 600.7(a)(1), it loses its eligibility on the last day of the award year being evaluated under that provision.
(b) If the Secretary undertakes to terminate the eligibility of an institution because it violated the provisions of § 600.5(a)(8) or § 600.7(a), and the institution requests a hearing, the presiding official must terminate the institution's eligibility if it violated those provisions, notwithstanding its status at the time of the hearing.
(c)(1) If the Secretary designates an institution or any of its educational programs or locations as eligible on the basis of inaccurate information or documentation, the Secretary's designation is void from the date the Secretary made the designation, and the institution or program or location, as applicable, never qualified as eligible.
(2) If an institution closes its main campus or stops providing any educational programs on its main campus, it loses its eligibility as an institution, and that loss of eligibility includes all its locations and all its programs. Its loss of eligibility is effective on the date it closes that campus or stops providing any educational program at that campus.
(d) Except as otherwise provided in this part, if an institution ceases to satisfy any of the requirements for eligibility under this part—
(1) It must notify the Secretary within 30 days of the date that it ceases to satisfy that requirement; and
(2) It becomes ineligible to continue to participate in any HEA program as of the date it ceases to satisfy any of the requirements.
(a) If the Secretary believes that a previously designated eligible institution as a whole, or at one or more of its locations, does not satisfy the statutory or regulatory requirements that define that institution as an eligible institution, the Secretary may—
(1) Terminate the institution's eligibility designation in whole or as to a particular location—
(i) Under the procedural provisions applicable to terminations contained in 34 CFR 668.81, 668.83, 668.86, 668.87, 668.88, 668.89, 668.90 (a)(1), (a)(4), and (c) through (f), and 668.91; or
(ii) Under a show-cause hearing, if the institution's loss of eligibility results from—
(A) Its previously qualifying as an eligible vocational school;
(B) Its previously qualifying as an eligible institution, notwithstanding its unaccredited status, under the transfer-of-credit alternative to accreditation (as that alternative existed in 20 U.S.C. 1085, 1088, and 1141(a)(5)(B) and § 600.8 until July 23, 1992);
(C) Its loss of accreditation or preaccreditation;
(D) Its loss of legal authority to provide postsecondary education in the State in which it is physically located;
(E) Its violations of the provisions contained in § 600.5(a)(8) or § 600.7(a);
(F) Its permanently closing; or
(G) Its ceasing to provide educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution, a particular location, or the students of the institution or location;
(2) Limit, under the provisions of 34 CFR 668.86, the authority of the institution to disburse, deliver, or cause the disbursement or delivery of funds under one or more title IV, HEA programs as otherwise provided under 34 CFR 668.26 for the benefit of students enrolled at the ineligible institution or location prior to the loss of eligibility of that institution or location; and
(3) Initiate an emergency action under the provisions contained in 34 CFR 668.83 with regard to the institution's participation in one or more title IV, HEA programs.
(b) If the Secretary believes that an educational program offered by an institution that was previously designated by the Secretary as an eligible institution under the HEA does not satisfy relevant statutory or regulatory requirements that define that educational program as part of an eligible institution, the Secretary may in accordance with the procedural provisions described in paragraph (a) of this section—
(1) Undertake to terminate that educational program's eligibility under one or more of the title IV, HEA programs under the procedural provisions applicable to terminations described in paragraph (a) of this section;
(2) Limit the institution's authority to deliver, disburse, or cause the delivery or disbursement of funds provided under that title IV, HEA program to students enrolled in that educational program, as otherwise provided in 34 CFR 668.26; and
(3) Initiate an emergency action under the provisions contained in 34 CFR 668.83 with regard to the institution's participation in one or more title IV, HEA programs with respect to students enrolled in that educational program.
(c)(1) An action to terminate and limit the eligibility of an institution as a whole or as to any of its locations or educational programs is initiated in accordance with 34 CFR 668.86(b) and becomes final 20 days after the Secretary notifies the institution of the proposed action, unless the designated department official receives by that date a request for a hearing or written material that demonstrates that the termination and limitation should not take place.
(2) Once a termination under this section becomes final, the termination is effective with respect to any commitment, delivery, or disbursement of funds provided under an applicable title IV, HEA program by the institution—
(i) Made to students enrolled in the ineligible institution, location, or educational program; and
(ii) Made on or after the date of the act or omission that caused the loss of eligibility as to the institution, location, or educational program.
(3) Once a limitation under this section becomes final, the limitation is effective with regard to any commitment, delivery, or disbursement of funds under the applicable title IV, HEA program by the institution—
(i) Made after the date on which the limitation became final; and
(ii) Made to students enrolled in the ineligible institution, location, or educational program.
(d) After a termination under this section of the eligibility of an institution as a whole or as to a location or educational program becomes final, the institution may not certify applications for, make awards of or commitments for, deliver, or disburse funds under the applicable title IV, HEA program, except—
(1) In accordance with the requirements of 34 CFR 668.26(c) with respect to students enrolled in the ineligible institution, location, or educational program; and
(2) After satisfaction of any additional requirements, imposed pursuant to a limitation under paragraph (a)(2) of this section, which may include the following:
(i) Completion of the actions required by 34 CFR 668.26(a) and (b).
(ii) Demonstration that the institution has made satisfactory arrangements for the completion of actions required by 34 CFR 668.26(a) and (b).
(iii) Securing the confirmation of a third party selected by the Secretary
(iv) Using institutional funds to make disbursements permitted under this paragraph and seeking reimbursement from the Secretary for those disbursements.
(e) If the Secretary undertakes to terminate the eligibility of an institution, location, or program under paragraphs (a) and (b) of this section:
(1) If the basis for the loss of eligibility is the loss of accreditation or preaccreditation, the sole issue is whether the institution, location, or program has the requisite accreditation or preaccreditation. The presiding official has no authority to consider challenges to the action of the accrediting agency.
(2) If the basis for the loss of eligibility is the loss of legal authorization, the sole issue is whether the institution, location, or program has the requisite legal authorization. The presiding official has no authority to consider challenges to the action of a State agency in removing the legal authorization.
(a) A foreign institution is eligible to apply to participate in the Federal Family Education Loan (FFEL) programs if it is comparable to an eligible institution of higher education located in the United States and has been approved by the Secretary in accordance with the provisions of this subpart.
(b) This subpart E contains the procedures and criteria under which a foreign institution may be deemed eligible to apply to participate in the FFEL programs.
(c) This subpart E does not include the procedures and criteria by which a foreign institution that is deemed eligible to apply to participate in the FFEL programs actually applies for that participation. Those procedures and criteria are contained in the regulations for the FFEL programs, 34 CFR part 682, subpart F.
The following definitions apply to this subpart E:
(a) To be designated as eligible to apply to participate in the FFEL programs or to continue to be eligible beyond the scheduled expiration of the institution's current period of eligibility, a foreign institution must—
(1) Apply on the form prescribed by the Secretary; and
(2) Provide all the information and documentation requested by the Secretary to make a determination of that eligibility.
(b) If a foreign institution fails to provide, release, or authorize release to the Secretary of information that is required in this subpart E, the institution is ineligible to apply to participate in the FFEL programs.
The Secretary considers a foreign institution to be comparable to an eligible institution of higher education in the United States and eligible to apply to participate in the FFEL programs if the foreign institution is a public or private nonprofit educational institution that—
(a) Admits as regular students only persons who—
(1) Have a secondary school completion credential; or
(2) Have the recognized equivalent of a secondary school completion credential;
(b) Is legally authorized by an appropriate authority to provide an eligible educational program beyond the secondary school level in the country in which the institution is located; and
(c) Provides an eligible education program—
(1) For which the institution is legally authorized to award a degree that is equivalent to an associate, baccalaureate, graduate, or professional degree awarded in the United States;
(2) That is at least a two-academic-year program acceptable for full credit toward the equivalent of a baccalaureate degree awarded in the United States; or
(3) That is equivalent to at least a one-academic-year training program in the United States that leads to a certificate, degree, or other recognized educational credential and prepares students for gainful employment in a recognized occupation.
(a) The Secretary considers a foreign graduate medical school to be eligible to apply to participate in the FFEL programs if, in addition to satisfying the criteria in § 600.54 (except the criterion that the institution be public or private nonprofit), the school satisfies all of the following criteria:
(1) The school provides, and in the normal course requires its students to complete, a program of clinical and classroom medical instruction of not less that 32 months in length, that is supervised closely by members of the school's faculty and that is provided either—
(i) Outside the United States, in facilities adequately equipped and staffed to afford students comprehensive clinical and classroom medical instruction; or
(ii) In the United States, through a training program for foreign medical students that has been approved by all medical licensing boards and evaluating bodies whose views are considered relevant by the Secretary.
(2) The school has graduated classes during each of the two twelve-month periods immediately preceding the date the Secretary receives the school's request for an eligibility determination.
(3) The school employs for the program described in paragraph (a)(1) of this section only those faculty members whose academic credentials are the equivalent of credentials required of faculty members teaching the same or similar courses at medical schools in the United States.
(4)(i) The school has been approved by an accrediting body—
(A) That is legally authorized to evaluate the quality of graduate medical school educational programs and facilities in the country where the school is located; and
(B) Whose standards of accreditation of graduate medical schools—
(
(
(ii) The school is a public or private nonprofit educational institution that satisfies the requirements in § 600.4(a)(5)(i).
(5)(i)(A) During the academic year preceding the year for which any of the school's students seeks an FFEL program loan, at least 60 percent of those enrolled as full-time regular students in the school and at least 60 percent of the school's most recent graduating
(B) At least 60 percent of the school's students and graduates who took any step of the examinations administered by the Educational Commission for Foreign Medical Graduates (ECFMG) (including the ECFMG English test) in the year preceding the year for which any of the school's students seeks an FFEL program loan received passing scores on the exams; or
(ii) The school's clinical training program was approved by a State as of January 1, 1992, and is currently approved by that State.
(b) In performing the calculation required in paragraph (a)(5)(i)(B) of this section, a foreign graduate medical school shall count as a graduate each person who graduated from the school during the three years preceding the year for which the calculation is performed.
(a) The Secretary considers a foreign veterinary school to be eligible to apply to participate in the FFEL programs if, in addition to satisfying the criteria in § 600.54 (except the criterion that the institution be public or private nonprofit), the school satisfies all of the following criteria:
(1) The school provides, and in the normal course requires its students to complete, a program of clinical and classroom veterinary instruction that is supervised closely by members of the school's faculty, and that is provided either—
(i) Outside the United States, in facilities adequately equipped and staffed to afford students comprehensive clinical and classroom veterinary instruction; or
(ii) In the United States, through a training program for foreign veterinary students that has been approved by all veterinary licensing boards and evaluating bodies whose views are considered relevant by the Secretary.
(2) The school has graduated classes during each of the two twelve-month periods immediately preceding the date the Secretary receives the school's request for an eligibility determination.
(3) The school employs for the program described in paragraph (a)(1) of this section only those faculty members whose academic credentials are the equivalent of credentials required of faculty members teaching the same or similar courses at veterinary schools in the United States.
(4) Either—
(i) The veterinary school's clinical training program was approved by a State as of January 1, 1992, and is currently approved by that State; or
(ii) The veterinary school's students complete their clinical training at an approved veterinary school located in the United States.
(b) [Reserved]
(a) The eligibility of a foreign institution under this subpart expires four years after the date of the Secretary's determination that the institution is eligible to apply for participation, except that the Secretary may specify a shorter period of eligibility. In the case of a foreign graduate medical school, continued eligibility is dependent upon annual submission of the data and information required under § 600.55(a)(5)(i), subject to the terms described in § 600.53(b).
(b) A foreign institution that has been determined eligible loses its eligibility on the date that the institution no longer meets any of the criteria in this subpart E.
(c) Notwithstanding the provisions of 34 CFR 668.26, if a foreign institution loses its eligibility under this subpart E, an otherwise eligible student, continuously enrolled at the institution before the loss of eligibility, may receive an FFEL program loan for attendance at that institution for the academic year succeeding the academic year in which that institution lost its
20 U.S.C. 1099b, unless otherwise noted.
(a) The Secretary recognizes accrediting agencies to ensure that these agencies are, for the purposes of the Higher Education Act of 1965, as amended (HEA), or for other Federal purposes, reliable authorities regarding the quality of education or training offered by the institutions or programs they accredit.
(b) The Secretary lists an agency as a nationally recognized accrediting agency if the agency meets the criteria for recognition listed in subpart B of this part.
(a) Periodically, the Secretary publishes a list of recognized agencies in the
(b) If the Secretary denies continued recognition to a previously recognized agency, or if the Secretary limits, suspends, or terminates the agency's recognition before the end of its recognition period, the Secretary publishes a notice of that action in the
The following definitions apply to this part:
(1) Television, audio, or computer transmission, such as open broadcast, closed circuit, cable, microwave, or satellite transmission;
(2) Audio or computer conferencing;
(3) Video cassettes or disks; or
(4) Correspondence.
(1) An employee, member of the governing board, owner, or shareholder of, or consultant to, an institution or program that either is accredited or preaccredited by the agency or has applied for accreditation or preaccreditation;
(2) A member of any trade association or membership organization related to, affiliated with, or associated with the agency; or
(3) A spouse, parent, child, or sibling of an individual identified in paragraph (1) or (2) of this definition.
(1) Geographic area of accrediting activities;
(2) Types of degrees and certificates covered;
(3) Types of institutions and programs covered;
(4) Types of preaccreditation status covered, if any; and
(5) Coverage of accrediting activities related to distance education, if any.
The agency must demonstrate that—
(a) If the agency accredits institutions of higher education, its accreditation is a required element in enabling at least one of those institutions to establish eligibility to participate in HEA programs; or
(b) If the agency accredits institutions of higher education or higher education programs, or both, its accreditation is a required element in enabling at least one of those entities to establish eligibility to participate in non-HEA Federal programs.
The agency must demonstrate that its accrediting activities cover—
(a) A State, if the agency is part of a State government;
(b) A region of the United States that includes at least three States that are reasonably close to one another; or
(c) The United States.
(a) An agency seeking initial recognition must demonstrate that it has—
(1) Granted accreditation or preaccreditation—
(i) To one or more institutions if it is requesting recognition as an institutional accrediting agency and to one or more programs if it is requesting recognition as a programmatic accrediting agency;
(ii) That covers the range of the specific degrees, certificates, institutions, and programs for which it seeks recognition; and
(iii) In the geographic area for which it seeks recognition; and
(2) Conducted accrediting activities, including deciding whether to grant or deny accreditation or preaccreditation, for at least two years prior to seeking recognition.
(b) A recognized agency seeking an expansion of its scope of recognition must demonstrate that it has granted accreditation or preaccreditation covering the range of the specific degrees, certificates, institutions, and programs for which it seeks the expansion of scope.
The agency must demonstrate that its standards, policies, procedures, and decisions to grant or deny accreditation are widely accepted in the United States by—
(a) Educators and educational institutions; and
(b) Licensing bodies, practitioners, and employers in the professional or vocational fields for which the educational institutions or programs within the agency's jurisdiction prepare their students.
(a) The Secretary recognizes only the following four categories of agencies:
(b) For purposes of this section, the term
(1) The members of the agency's decision-making body—who decide the accreditation or preaccreditation status of institutions or programs, establish the agency's accreditation policies, or both—are not elected or selected by the board or chief executive officer of any related, associated, or affiliated trade association or membership organization;
(2) At least one member of the agency's decision-making body is a representative of the public, and at least one-seventh of that body consists of representatives of the public;
(3) The agency has established and implemented guide lines for each member of the decision-making body to
(4) The agency's dues are paid separately from any dues paid to any related, associated, or affiliated trade association or membership organization; and
(5) The agency develops and determines its own budget, with no review by or consultation with any other entity or organization.
(c) The Secretary considers that any joint use of personnel, services, equipment, or facilities by an agency and a related, associated, or affiliated trade association or membership organization does not violate the “separate and independent” requirements in paragraph (b) of this section if—
(1) The agency pays the fair market value for its proportionate share of the joint use; and
(2) The joint use does not compromise the independence and confidentiality of the accreditation process.
(d) For purposes of paragraph (a)(3) of this section, the Secretary may waive the “separate and independent” requirements in paragraph (b) of this section if the agency demonstrates that—
(1) The Secretary listed the agency as a nationally recognized agency on or before October 1, 1991 and has recognized it continuously since that date;
(2) The related, associated, or affiliated trade association or membership organization plays no role in making or ratifying either the accrediting or policy decisions of the agency;
(3) The agency has sufficient budgetary and administrative autonomy to carry out its accrediting functions independently; and
(4) The agency provides to the related, associated, or affiliated trade association or membership organization only information it makes available to the public.
(e) An agency seeking a waiver of the “separate and independent” requirements under paragraph (d) of this section must apply for the waiver each time the agency seeks recognition or continued recognition.
The agency must have the administrative and fiscal capability to carry out its accreditation activities in light of its requested scope of recognition. The agency meets this requirement if the agency demonstrates that—
(a) The agency has—
(1) Adequate administrative staff and financial resources to carry out its accrediting responsibilities;
(2) Competent and knowledgeable individuals, qualified by education and experience in their own right and trained by the agency on its standards, policies, and procedures, to conduct its on-site evaluations, establish its policies, and make its accrediting and preaccrediting decisions;
(3) Academic and administrative personnel on its evaluation, policy, and decision-making bodies, if the agency accredits institutions;
(4) Educators and practitioners on its evaluation, policy, and decision-making bodies, if the agency accredits programs or single-purpose institutions that prepare students for a specific profession;
(5) Representatives of the public on all decision-making bodies; and
(6) Clear and effective controls against conflicts of interest, or the appearance of conflicts of interest, by the agency's—
(i) Board members;
(ii) Commissioners;
(iii) Evaluation team members;
(iv) Consultants;
(v) Administrative staff; and
(vi) Other agency representatives; and
(b) The agency maintains complete and accurate records of—
(1) Its last two full accreditation or preaccreditation reviews of each institution or program, including on-site evaluation team reports, the institution's or program's responses to on-site reports, periodic review reports, any reports of special reviews conducted by the agency between regular reviews, and a copy of the institution's or program's most recent self-study; and
(2) All decisions regarding the accreditation and preaccreditation of any institution or program, including all
(a) The agency must demonstrate that it has standards for accreditation, and preaccreditation, if offered, that are sufficiently rigorous to ensure that the agency is a reliable authority regarding the quality of the education or training provided by the institutions or programs it accredits. The agency meets this requirement if—
(1) The agency's accreditation standards effectively address the quality of the institution or program in the following areas:
(i) Success with respect to student achievement in relation to the institution's mission, including, as appropriate, consideration of course completion, State licensing examination, and job placement rates.
(ii) Curricula.
(iii) Faculty.
(iv) Facilities, equipment, and supplies.
(v) Fiscal and administrative capacity as appropriate to the specified scale of operations.
(vi) Student support services.
(vii) Recruiting and admissions practices, academic calendars, catalogs, publications, grading, and advertising.
(viii) Measures of program length and the objectives of the degrees or credentials offered.
(ix) Record of student complaints received by, or available to, the agency.
(x) Record of compliance with the institution's program responsibilities under Title IV of the Act, based on the most recent student loan default rate data provided by the Secretary, the results of financial or compliance audits, program reviews, and any other information that the Secretary may provide to the agency; and
(2) The agency's preaccreditation standards, if offered, are appropriately related to the agency's accreditation standards and do not permit the institution or program to hold preaccreditation status for more than five years.
(b) If the agency only accredits programs and does not serve as an institutional accrediting agency for any of those programs, its accreditation standards must address the areas in paragraph (a)(1) of this section in terms of the type and level of the program rather than in terms of the institution.
(c) If none of the institutions an agency accredits participates in any Title IV, HEA program, or if the agency only accredits programs within institutions that are accredited by a nationally recognized institutional accrediting agency, the agency is not required to have the accreditation standards described in paragraphs (a)(1)(viii) and (a)(1)(x) of this section.
(d) An agency that has established and applies the standards in paragraph (a) of this section may establish any additional accreditation standards it deems appropriate.
The agency must have effective mechanisms for evaluating an institution's or program's compliance with the agency's standards before reaching a decision to accredit or preaccredit the institution or program. The agency meets this requirement if the agency demonstrates that it—
(a) Evaluates whether an institution or program—
(1) Maintains clearly specified educational objectives that are consistent with its mission and appropriate in light of the degrees or certificates awarded;
(2) Is successful in achieving its stated objectives; and
(3) Maintains degree and certificate requirements that at least conform to commonly accepted standards;
(b) Requires the institution or program to prepare, following guidance provided by the agency, an in-depth self-study that includes the assessment
(c) Conducts at least one on-site review of the institution or program during which it obtains sufficient information to determine if the institution or program complies with the agency's standards;
(d) Allows the institution or program the opportunity to respond in writing to the report of the on-site review;
(e) Conducts its own analysis of the self-study and supporting documentation furnished by the institution or program, the report of the on-site review, the institution's or program's response to the report, and any other appropriate information from other sources to determine whether the institution or program complies with the agency's standards; and
(f) Provides the institution or program with a detailed written report that assesses—
(1) The institution's or program's compliance with the agency's standards, including areas needing improvement; and
(2) The institution's or program's performance with respect to student achievement.
The agency must consistently apply and enforce its standards to ensure that the education or training offered by an institution or program, including any offered through distance 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 effective controls against the inconsistent application of the agency's standards;
(b) Bases decisions regarding accreditation and preaccreditation on the agency's published standards; and
(c) Has a reasonable basis for determining that the information the agency relies on for making accrediting decisions is accurate.
(a) The agency must reevaluate, at regularly established intervals, the institutions or programs it has accredited or preaccredited.
(b) The agency must monitor institutions or programs throughout their accreditation or preaccreditation period to ensure that they remain in compliance with the agency's standards. This includes conducting special evaluations or site visits, as necessary.
(a) If the agency's review of an institution or program under any standard indicates that the institution or program is not in compliance with that standard, the agency must—
(1) Immediately initiate adverse action against the institution or program; or
(2) Require the institution or program to take appropriate action to bring itself into compliance with the agency's standards within a time period that must not exceed—
(i) Twelve months, if the program, or the longest program offered by the institution, is less than one year in length;
(ii) Eighteen months, if the program, or the longest program offered by the institution, is at least one year, but less than two years, in length; or
(iii) Two years, if the program, or the longest program offered by the institution, is at least two years in length.
(b) If the institution or program does not bring itself into compliance within the specified period, the agency must take immediate adverse action unless the agency, for good cause, extends the period for achieving compliance.
(a) The agency must maintain a systematic program of review that demonstrates that its standards are adequate to evaluate the quality of the education or training provided by the institutions and programs it accredits and relevant to the educational or training needs of students.
(b) The agency determines the specific procedures it follows in evaluating its standards, but the agency must ensure that its program of review—
(1) Is comprehensive;
(2) Occurs at regular, yet reasonable, intervals or on an ongoing basis;
(3) Examines each of the agency's standards and the standards as a whole; and
(4) Involves all of the agency's relevant constituencies in the review and affords them a meaningful opportunity to provide input into the review.
(c) If the agency determines, at any point during its systematic program of review, that it needs to make changes to its standards, the agency must initiate action within 12 months to make the changes and must complete that action within a reasonable period of time. Before finalizing any changes to its standards, the agency must—
(1) Provide notice to all of the agency's relevant constituencies, and other parties who have made their interest known to the agency, of the changes the agency proposes to make;
(2) Give the constituencies and other interested parties adequate opportunity to comment on the proposed changes; and
(3) Take into account any comments on the proposed changes submitted timely by the relevant constituencies and by other interested parties.
(a) If the agency accredits institutions, it must maintain adequate substantive change policies that ensure that any substantive change to the educational mission, program, or programs of an institution after the agency has accredited or preaccredited the institution does not adversely affect the capacity of the institution to continue to meet the agency's standards. The agency meets this requirement if—
(1) The agency requires the institution to obtain the agency's approval of the substantive change before the agency includes the change in the scope of accreditation or preaccreditation it previously granted to the institution; and
(2) The agency's definition of substantive change includes at least the following types of change:
(i) Any change in the established mission or objectives of the institution.
(ii) Any change in the legal status, form of control, or ownership of the institution.
(iii) The addition of courses or programs that represent a significant departure, in either content or method of delivery, from those that were offered when the agency last evaluated the institution.
(iv) The addition of courses or programs at a degree or credential level above that which is included in the institution's current accreditation or preaccreditation.
(v) A change from clock hours to credit hours.
(vi) A substantial increase in the number of clock or credit hours awarded for successful completion of a program.
(vii) The establishment of an additional location geographically apart from the main campus at which the institution offers at least 50 percent of an educational program.
(b) The agency may determine the procedures it uses to grant prior approval of the substantive change. Except as provided in paragraph (c) of this section, these may, but need not, require a visit by the agency.
(c) 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 described in paragraph (a)(2)(vii) of this section must determine if the institution has the fiscal and administrative capacity to operate the additional location. In addition, the agency's procedures must include—
(1) A visit, within six months, to each additional location the institution establishes, if the institution—
(i) Has a total of three or fewer additional locations;
(ii) Has not demonstrated, to the agency's satisfaction, that it has a proven record of effective educational oversight of additional locations; or
(iii) Has been placed on warning, probation, or show cause by the agency or is subject to some limitation by the agency on its accreditation or preaccreditation status;
(2) An effective mechanism for conducting, at reasonable intervals, visits to additional locations of institutions that operate more than three additional locations; and
(3) An effective mechanism, which may, at the agency's discretion, include visits to additional locations, for ensuring that accredited and preaccredited institutions that experience rapid growth in the number of additional locations maintain educational quality.
(d) The purpose of the visits described in paragraph (c) of this section is to verify that the additional location has the personnel, facilities, and resources it claimed to have in its application to the agency for approval of the additional location.
(a) The agency must maintain and make available to the public, upon request, written materials describing—
(1) Each type of accreditation and preaccreditation it grants;
(2) The procedures that institutions or programs must follow in applying for accreditation or preaccreditation;
(3) The standards and procedures it uses to determine whether to grant, reaffirm, reinstate, restrict, deny, revoke, terminate, or take any other action related to each type of accreditation and preaccreditation that the agency grants;
(4) The institutions and programs that the agency currently accredits or preaccredits and, for each institution and program, the year the agency will next review or reconsider it for accreditation or preaccreditation; and
(5) The names, academic and professional qualifications, and relevant employment and organizational affiliations of—
(i) The members of the agency's policy and decision-making bodies; and
(ii) The agency's principal administrative staff.
(b) In providing public notice that an institution or program subject to its jurisdiction is being considered for accreditation or preaccreditation, the agency must provide an opportunity for third-party comment concerning the institution's or program's qualifications for accreditation or preaccreditation. At the agency's discretion, third-party comment may be received either in writing or at a public hearing, or both.
(c) The accrediting agency must—
(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;
(2) Take follow-up action, as necessary, including enforcement action, if necessary, based on the results of its review; and
(3) Review in a timely, fair, and equitable manner, and apply unbiased judgment to, any complaints against itself and take follow-up action, as appropriate, based on the results of its review.
(d) If an institution or program elects to make a public disclosure of its accreditation or preaccreditation status, the agency must ensure that the institution or program discloses that status accurately, including the specific academic or instructional programs covered by that status and the name, address, and telephone number of the agency.
(e) The accrediting agency must provide for the public correction of incorrect or misleading information an accredited or preaccredited institution or program releases about—
(1) The accreditation or preaccreditation status of the institution or program;
(2) The contents of reports of on-site reviews; and
(3) The agency's accrediting or preaccrediting actions with respect to the institution or program.
(f) The agency may establish any additional operating procedures it deems appropriate. At the agency's discretion, these may include unannounced inspections.
If the agency is an institutional accrediting agency and its accreditation or preaccreditation enables those institutions to obtain eligibility to participate in Title IV, HEA programs, the agency must demonstrate that it has established and uses all of the following procedures:
(a)
(i) The educational program to be offered at the branch campus;
(ii) The projected revenues and expenditures and cash flow at the branch campus; and
(iii) The operation, management, and physical resources at the branch campus.
(2) The agency may extend accreditation to the branch campus only after it evaluates the business plan and takes whatever other actions it deems necessary to determine that the branch campus has sufficient educational, financial, operational, management, and physical resources to meet the agency's standards.
(3) The agency must undertake a site visit to the branch campus as soon as practicable, but no later than six months after the establishment of that campus.
(b)
(c)
(2) 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 provide an educational program that is of acceptable quality and reasonably similar in content, structure, and scheduling to that provided by the closed institution; 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.
(3) If an institution the agency accredits or preaccredits closes, the agency must work with the Department and the appropriate State agency, to the extent feasible, to ensure that students are given reasonable opportunities to complete their education without additional charge.
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) The agency uses procedures that afford an institution or program a reasonable period of time to comply with the agency's requests for information and documents.
(b) The agency 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.
(c) The agency permits the institution or program the opportunity to appeal an adverse action and the right to be represented by counsel during that appeal. If the agency allows institutions or programs the right to appeal other types of actions, the agency has the discretion to limit the appeal to a written appeal.
(d) The agency notifies the institution or program in writing of the result of its appeal and the basis for that result.
The agency must demonstrate that it has established and follows written procedures requiring it to provide written notice of its accrediting decisions to the Secretary, the appropriate State licensing or authorizing agency, the appropriate accrediting agencies, and the public. The agency meets this requirement if the agency, following its written procedures—
(a) Provides written notice of the following types of decisions to the Secretary, the appropriate State licensing or authorizing agency, the appropriate accrediting agencies, and the public no later than 30 days after it makes the decision:
(1) A decision to award initial accreditation or preaccreditation to an institution or program.
(2) A decision to renew an institution's or program's accreditation or preaccreditation;
(b) Provides written notice of the following types of decisions to the Secretary, the appropriate State licensing or authorizing agency, and the appropriate accrediting agencies at the same time it notifies the institution or program of the decision, but no later than 30 days after it reaches the decision:
(1) A final decision to place an institution or program on probation or an equivalent status.
(2) A final decision to deny, withdraw, suspend, revoke, or terminate the accreditation or preaccreditation of an institution or program;
(c) Provides written notice to the public of the decisions listed in paragraphs (b)(1) and (b)(2) of this section within 24 hours of its notice to the institution or program;
(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 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 may wish to make with regard to that decision; and
(e) Notifies the Secretary, the appropriate State licensing or authorizing agency, the appropriate accrediting agencies, and, upon request, the public if an accredited or preaccredited institution or program—
(1) Decides to withdraw voluntarily from accreditation or preaccreditation, within 30 days of receiving notification from the institution or program that it is withdrawing voluntarily from accreditation or preaccreditation; or
(2) Lets its accreditation or preaccreditation lapse, within 30 days of the date on which accreditation or preaccreditation lapses.
The agency must submit to the Department—
(a) A copy of any annual report it prepares;
(b) A copy, updated annually, of its directory of accredited and preaccredited institutions and programs;
(c) 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;
(d) Any proposed change in the agency's policies, procedures, or accreditation or preaccreditation standards that might alter its—
(1) Scope of recognition; or
(2) Compliance with the criteria for recognition;
(e) 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
(f) 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. The Secretary may ask for this information to assist the Department in resolving problems with the institution's
(a) If the agency is an institutional accrediting agency, it may not accredit or preaccredit institutions that lack legal authorization under applicable State law to provide a program of education beyond the secondary level.
(b) Except as provided in paragraph (c) of this section, the agency may not grant initial or renewed accreditation or preaccreditation to an institution, or a program offered by an institution, if the agency knows, or has reasonable cause to know, that the institution is the subject of—
(1) A pending or final action brought by a State agency to suspend, revoke, withdraw, or terminate the institution's legal authority to provide postsecondary education in the State;
(2) A decision by a recognized agency to deny accreditation or preaccreditation;
(3) A pending or final action brought by a recognized accrediting agency to suspend, revoke, withdraw, or terminate the institution's accreditation or preaccreditation; or
(4) Probation or an equivalent status imposed by a recognized agency.
(c) The agency may grant accreditation or preaccreditation to an institution or program described in paragraph (b) of this section only if it provides to the Secretary, within 30 days of its action, a thorough and reasonable explanation, consistent with its standards, why the action of the other body does not preclude the agency's grant of accreditation or preaccreditation.
(d) If the agency learns that an institution it accredits or preaccredits, or an institution that offers a program it accredits or preaccredits, is the subject of an adverse action by another recognized accrediting agency or has been placed on probation or an equivalent status by another recognized agency, the agency must promptly review its accreditation or preaccreditation of the institution or program to determine if it should also take adverse action or place the institution or program on probation or show cause.
(e) The agency must, upon request, share with other appropriate recognized accrediting agencies and recognized State approval agencies information about the accreditation or preaccreditation status of an institution or program and any adverse actions it has taken against an accredited or preaccredited institution or program.
(a) An accrediting agency seeking initial or continued recognition must submit a written application to the Secretary. The application must consist of—
(1) A statement of the agency's requested scope of recognition;
(2) Evidence that the agency complies with the criteria for recognition listed in subpart B of this part; and
(3) Supporting documentation.
(b) By submitting an application for recognition, the agency authorizes Department staff to observe its site visits and decision meetings and to gain access to agency records, personnel, and facilities on an announced or unannounced basis.
(c) The Secretary does not make available to the public any confidential agency materials a Department employee reviews during the evaluation of either the agency's application for recognition or the agency's compliance with the criteria for recognition.
(a) Upon receipt of an agency's application for either initial or continued recognition, Department staff—
(1) Establishes a schedule for the review of the agency by Department staff, the National Advisory Committee on Institutional Quality and Integrity, and the Secretary;
(2) Publishes a notice of the agency's application in the
(3) Provides State licensing or authorizing agencies, all currently recognized accrediting agencies, and other appropriate organizations with copies of the
(b) Department staff analyzes the agency's application 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 any deficiencies in the agency's performance with respect to the criteria. The analysis includes—
(1) Site visits, on an announced or unannounced basis, to the agency and, at the Secretary's discretion, to some 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, 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) Department staff's evaluation 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 standards, and the agency's application of those standards.
(d) If, at any point in its evaluation of an agency seeking initial recognition, Department staff determines that the agency fails to demonstrate substantial 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.
(e) Except with respect to an application that is withdrawn under paragraph (d) of this section, when Department staff completes its evaluation of the agency, the staff—
(1) Prepares a written analysis of the agency, which includes a recognition recommendation;
(2) Sends the analysis and all supporting documentation, including all third-party comments the Department received by the established deadline, to the agency no later than 45 days before the Advisory Committee meeting; and
(3) Invites the agency to provide a written response to the staff analysis and third-party comments, specifying a deadline for the response that is at least two weeks before the Advisory Committee meeting.
(f) If Department staff fails to provide the agency with the materials described in paragraph (e)(2) of this section at least 45 days before the Advisory Committee meeting, the agency may request that the Advisory Committee defer acting on the application at that meeting. If Department staff's failure to send the materials at least 45 days before the Advisory Committee meeting is due to the failure of the agency to submit reports or other information the Secretary requested by the deadline the Secretary established, the agency forfeits its right to request a deferral.
(g) Department staff reviews any response to the staff analysis that the agency submits. If necessary, Department staff prepares an addendum to the staff analysis and provides the agency with a copy.
(h) Before the Advisory Committee meeting, Department staff provides the Advisory Committee with the following information:
(1) The agency's application for recognition and supporting documentation.
(2) The Department staff analysis of the agency.
(3) Any written third-party comments the Department received about
(4) Any agency response to either the Department staff analysis or third-party comments.
(5) Any addendum to the Department staff analysis.
(6) Any other information Department staff relied on in developing its analysis.
(i) At least 30 days before the Advisory Committee meeting, the Department publishes a notice of the meeting in the
(a) The Advisory Committee considers an agency's application for recognition at a public meeting and invites Department staff, the agency, and other interested parties to make oral presentations at the meeting. A transcript is made of each Advisory Committee meeting.
(b) When it concludes its review, the Advisory Committee recommends that the Secretary either approve or deny recognition or that the Secretary defer a decision on the agency's application for recognition.
(1)(i) The Advisory Committee recommends approval of recognition if the agency complies with the criteria for recognition listed in subpart B of this part and if the agency is effective in its performance with respect to those criteria.
(ii) If the Advisory Committee recommends approval, the Advisory Committee also recommends a recognition period and a scope of recognition.
(iii) If the recommended scope or period of recognition is less than that requested by the agency, the Advisory Committee explains its reasons for recommending the lesser scope or recognition period.
(2)(i) If the agency fails to comply with the criteria for recognition in subpart B of this part, or if the agency is not effective in its performance with respect to those criteria, the Advisory Committee recommends denial of recognition, unless the Advisory Committee concludes that a deferral under paragraph (b)(3) of this section is warranted.
(ii) If the Advisory Committee recommends denial, the Advisory Committee specifies the reasons for its recommendation, including all criteria the agency fails to meet and all areas in which the agency fails to perform effectively.
(3)(i) The Advisory Committee may recommend deferral of a decision on recognition if it concludes that the agency's deficiencies do not warrant immediate loss of recognition and if it concludes that the agency will demonstrate or achieve compliance with the criteria for recognition and effective performance with respect to those criteria before the expiration of the deferral period.
(ii) In its deferral recommendation, the Advisory Committee states the bases for its conclusions, specifies any criteria for recognition the agency fails to meet, and identifies any areas in which the agency fails to perform effectively with respect to the criteria.
(iii) The Advisory Committee also recommends a deferral period, which may not exceed 12 months, either as a single deferral period or in combination with any expiring deferral period in which similar deficiencies in compliance or performance were cited by the Secretary.
(c) At the conclusion of its meeting, the Advisory Committee forwards its recommendations to the Secretary through the senior Department official.
(d) For any Advisory Committee recommendation not appealed under § 602.33, the senior Department official includes with the Advisory Committee materials forwarded to the Secretary a memorandum containing the senior Department official's recommendations regarding the actions proposed by the Advisory Committee.
(a) Either the agency or the senior Department official may appeal the Advisory Committee's recommendation. If a party wishes to appeal, that party must—
(1) Notify the Secretary and the other party in writing of its intent to appeal the recommendation no later than 10 days after the Advisory Committee meeting;
(2) Submit its appeal in writing to the Secretary no later than 30 days after the Advisory Committee meeting; and
(3) Provide the other party with a copy of the appeal at the same time it submits the appeal to the Secretary.
(b) The non-appealing party may file a written response to the appeal. If that party wishes to do so, it must—
(1) Submit its response to the Secretary no later than 30 days after receiving its copy of the appeal; and
(2) Provide the appealing party with a copy of its response at the same time it submits its response to the Secretary.
(c) Neither the agency nor the senior Department official may include any new evidence in its submission; i.e., evidence it did not previously submit to the Advisory Committee.
The Secretary makes the decision regarding recognition of an agency based on the entire record of the agency's application, including the following:
(a) The Advisory Committee's recommendation.
(b) The senior Department official's recommendation, if any.
(c) The agency's application and supporting documentation.
(d) The Department staff analysis of the agency.
(e) All written third-party comments forwarded by Department staff to the Advisory Committee for consideration at the meeting.
(f) Any agency response to the Department staff analysis and third-party comments.
(g) Any addendum to the Department staff analysis.
(h) All oral presentations at the Advisory Committee meeting.
(i) Any materials submitted by the parties, within the established timeframes, in an appeal taken in accordance with § 602.33.
(a) The Secretary notifies the agency in writing of the Secretary's decision regarding the agency's application for recognition.
(b) The Secretary either approves or denies recognition or defers a decision on the agency's application for recognition.
(1)(i) The Secretary approves recognition if the agency complies with the criteria for recognition listed in subpart B of this part and if the agency is effective in its performance with respect to those criteria.
(ii) If the Secretary approves recognition, the Secretary's recognition decision defines the scope of recognition and the recognition period.
(iii) If the scope or period of recognition is less than that requested by the agency, the Secretary explains the reasons for approving a lesser scope or recognition period.
(2)(i) If the agency fails to comply with the criteria for recognition in subpart B of this part, or if the agency is not effective in its performance with respect to those criteria, the Secretary denies recognition, unless the Secretary concludes that a deferral under paragraph (b)(3) of this section is warranted.
(ii) If the Secretary denies recognition, the Secretary specifies the reasons for this decision, including all criteria the agency fails to meet and all areas in which the agency fails to perform effectively.
(3)(i) The Secretary may defer a decision on recognition if the Secretary concludes that the agency's deficiencies do not warrant immediate loss
(ii) In the deferral decision, the Secretary states the bases for the Secretary's conclusions, specifies any criteria for recognition the agency fails to meet, and identifies any areas in which the agency fails to perform effectively with respect to the criteria.
(iii) The Secretary also establishes a deferral period, which begins on the date of the Secretary's decision.
(iv) The deferral period may not exceed 12 months, either as a single deferral period or in combination with any expiring deferral period in which similar deficiencies in compliance or performance were cited by the Secretary, except that the Secretary may grant an extension of an expiring deferral period at the request of the agency for good cause shown.
(c) The recognition period may not exceed five years.
(d) If the Secretary does not reach a final decision to approve or deny an agency's application for continued recognition before the expiration of its recognition period, the Secretary automatically extends the recognition period until the final decision is reached.
An agency may appeal the Secretary's decision under this part in the Federal courts as a final decision in accordance with applicable Federal law.
(a) If the Secretary determines, after notice and an opportunity for a hearing, that a recognized agency does not comply with the criteria for recognition in subpart B of this part or that the agency is not effective in its performance with respect to those criteria, the Secretary—
(1) Limits, suspends, or terminates the agency's recognition; or
(2) Requires the agency to take appropriate action to bring itself into compliance with the criteria and achieve effectiveness within a timeframe that may not exceed 12 months.
(b) If, at the conclusion of the timeframe specified in paragraph (a)(2) of this section, the Secretary determines, after notice and an opportunity for a hearing, that the agency has failed to bring itself into compliance or has failed to achieve effectiveness, the Secretary limits, suspends, or terminates recognition, unless the Secretary extends the timeframe, on request by the agency for good cause shown.
(a) Department staff initiates an action to limit, suspend, or terminate an agency's recognition by notifying the agency in writing of the Secretary's intent to limit, suspend, or terminate recognition. The notice—
(1) Describes the specific action the Secretary seeks to take against the agency and the reasons for that action, including the criteria with which the agency has failed to comply;
(2) Specifies the effective date of the action; and
(3) Informs the agency of its right to respond to the notice and request a hearing.
(b) Department staff may send the notice described in paragraph (a) of this section at any time the staff concludes that the agency fails to comply with the criteria for recognition in subpart B of this part or is not effective in its performance with respect to those criteria.
(a) If the agency wishes either to respond to the notice or request a hearing, or both, it must do so in writing no later than 30 days after it receives the
(1) The agency's submission must identify the issues and facts in dispute and the agency's position on them.
(2) If neither a response nor a request for a hearing is filed by the deadline, the notice of intent becomes a final decision by the Secretary.
(b)(1) After receiving the agency's response and hearing request, if any, the Secretary chooses a subcommittee composed of five members of the Advisory Committee to adjudicate the matter and notifies the agency of the subcommittee's membership.
(2) The agency may challenge membership of the subcommittee on grounds of conflict of interest on the part of one or more members and, if the agency's challenge is successful, the Secretary will replace the member or members challenged.
(c) After the subcommittee has been selected, Department staff sends the members of the subcommittee copies of the notice to limit, suspend, or terminate recognition, along with the agency's response, if any.
(d)(1) If a hearing is requested, it is held in Washington, DC, at a date and time set by Department staff.
(2) A transcript is made of the hearing.
(3) Except as provided in paragraph (e) of this section, the subcommittee allows Department staff, the agency, and any interested party to make an oral or written presentation, which may include the introduction of written and oral evidence.
(e) On agreement by Department staff and the agency, the subcommittee review may be based solely on the written materials submitted.
(a) After consideration of the notice of intent to limit, suspend, or terminate recognition, the agency's response, if any, and all submissions and presentations made at the hearing, if any, the subcommittee issues a written opinion and sends it to the Secretary, with copies to the agency and the senior Department official. The opinion includes—
(1) Findings of fact, based on consideration of all the evidence, presentations, and submissions before the subcommittee;
(2) A recommendation as to whether a limitation, suspension, or termination of the agency's recognition is warranted; and
(3) The reasons supporting the subcommittee's recommendation.
(b) Unless the subcommittee's recommendation is appealed under § 602.44, the Secretary issues a final decision on whether to limit, suspend, or terminate the agency's recognition. The Secretary bases the decision on consideration of the full record before the subcommittee and the subcommittee's opinion.
(a) Either the agency or the senior Department official may appeal the subcommittee's recommendation. If a party wishes to appeal, that party must—
(1) Notify the Secretary and the other party in writing of its intent to appeal the recommendation no later than 10 days after receipt of the recommendation;
(2) Submit its appeal to the Secretary in writing no later than 30 days after receipt of the recommendation; and
(3) Provide the other party with a copy of the appeal at the same time it submits the appeal to the Secretary.
(b) The non-appealing party may file a written response to the appeal. If that party wishes to do so, it must—
(1) Submit its response to the Secretary no later than 30 days after receiving its copy of the appeal; and
(2) Provide the appealing party with a copy of its response at the same time it submits its response to the Secretary.
(c) Neither the agency nor the senior Department official may include any new evidence in its submission, i.e.,
(d) If the subcommittee's recommendation is appealed, the Secretary renders a final decision after taking into account that recommendation and the parties’ written submissions on appeal, as well as the entire record before the subcommittee and the subcommittee's opinion.
An agency may appeal the Secretary's final decision limiting, suspending, or terminating its recognition to the Federal courts as a final decision in accordance with applicable Federal law.
(a) If the Department takes an action against an institution or program accredited by the agency, it notifies the agency no later than 10 days after taking that action.
(b) If another Federal agency or a State agency notifies the Department that it has taken an action against an institution or program accredited by the agency, the Department notifies the agency as soon as possible but no later than 10 days after receiving the written notice from the other Government agency.
20 U.S.C. 403(b), 1085(b), 1141(a), 1248(11); 42 U.S.C. 293a(b), 295f-3(b), 295h-4(1)(D), 298b(f); 38 U.S.C. 1775(a), unless otherwise noted.
Sec. 438(b) of the Higher Education Act of 1965, Pub. L. 89-329 as amended by Pub. L. 92-318, 86 Stat. 235, 264 (20 U.S.C. 1087-1(b)), unless otherwise noted.
(a) Pursuant to section 438(b) of the Higher Education Act of 1965 as amended by Pub. L. 92-318, the Secretary is required to publish a list of State agencies which he determines to be reliable authorities as to the quality of public postsecondary vocational education in their respective States for the purpose of determining eligibility for Federal student assistance programs administered by the Department.
(b) Approval by a State agency included on the list will provide an alternative means of satisfying statutory standards as to the quality of public postsecondary vocational education to be undertaken by students receiving assistance under such programs.
Periodically the Secretary will publish a list in the
Any State agency which desires to be listed by the Secretary as meeting the criteria set forth in § 603.24 should
For initial recognition and for renewal of recognition, the State agency will furnish information establishing its compliance with the criteria set forth in § 603.24. This information may be supplemented by personal interviews or by review of the agency's facilities, records, personnel qualifications, and administrative management. Each agency listed will be reevaluated by the Secretary at his discretion, but at least once every four years. No adverse decision will become final without affording an opportunity for a hearing.
The following are the criteria which the Secretary will utilize in designating a State agency as a reliable authority to assess the quality of public postsecondary vocational education in its respective State.
(a)
(1)
(i) Is statewide in the scope of its operations and is legally authorized to approve public postsecondary vocational institutions or programs;
(ii) Clearly sets forth the scope of its objectives and activities, both as to kinds and levels of public postsecondary vocational institutions or programs covered, and the kinds of operations performed;
(iii) Delineates the process by which it differentiates among and approves programs of varying levels.
(2)
(i) Employs qualified personnel and uses sound procedures to carry out its operations in a timely and effective manner;
(ii) Receives adequate and timely financial support, as shown by its appropriations, to carry out its operations;
(iii) Selects competent and knowledgeable persons, qualified by experience and training, and selects such persons in accordance with nondiscriminatory practices, (A) to participate on visiting teams, (B) to engage in consultative services for the evaluation and approval process, and (C) to serve on decision-making bodies.
(3)
(i) Maintains clear definitions of approval status and has developed written procedures for granting, reaffirming, revoking, denying, and reinstating approval status;
(ii) Requires, as an integral part of the approval and reapproval process, institutional or program self-analysis and onsite reviews by visiting teams, and provides written and consultative guidance to institutions or programs and visiting teams.
(A) Self-analysis shall be a qualitative assessment of the strengths and limitations of the instructional program, including the achievement of institutional or program objectives, and should involve a representative portion of the institution's administrative staff, teaching faculty, students, governing body, and other appropriate constituencies.
(B) The visiting team, which includes qualified examiners other than agency staff, reviews instructional content, methods and resources, administrative management, student services, and facilities. It prepares written reports and recommendations for use by the State agency.
(iii) Reevaluates at reasonable and regularly scheduled intervals institutions or programs which it has approved.
(b)
(1) Its responsiveness to the public interest. The State agency:
(i) Has an advisory body which provides for representation from public employment services and employers, employees, postsecondary vocational educators, students, and the general public, including minority groups. Among its functions, this structure
(ii) Demonstrates that the advisory body makes a real and meaningful contribution to the approval process;
(iii) Provides advance public notice of proposed or revised standards or regulations through its regular channels of communications, supplemented, if necessary, with direct communication to inform interested members of the affected community. In addition, it provides such persons the opportunity to comment on the standards or regulations prior to their adoption;
(iv) Secures sufficient qualitative information regarding the applicant institution or program to enable the institution or program to demonstrate that it has an ongoing program of evaluation of outputs consistent with its educational goals;
(v) Encourages experimental and innovative programs to the extent that these are conceived and implemented in a manner which ensures the quality and integrity of the institution or program;
(vi) Demonstrates that it approves only those institutions or programs which meet its published standards; that its standards, policies, and procedures are fairly applied; and that its evaluations are conducted and decisions are rendered under conditions that assure an impartial and objective judgment;
(vii) Regularly reviews its standards, policies and procedures in order that the evaluative process shall support constructive analysis, emphasize factors of critical importance, and reflect the educational and training needs of the student;
(viii) Performs no function that would be inconsistent with the formation of an independent judgment of the quality of an educational institution or program;
(ix) Has written procedures for the review of complaints pertaining to institutional or program quality as these relate to the agency's standards, and demonstrates that such procedures are adequate to provide timely treatment of such complaints in a manner fair and equitable to the complainant and to the institution or program;
(x) Annually makes available to the public (A) its policies for approval, (B) reports of its operations, and (C) list of institutions or programs which it has approved;
(xi) Requires each approved school or program to report on changes instituted to determine continued compliance with standards or regulations;
(xii) Confers regularly with counterpart agencies that have similar responsibilities in other and neighboring States about methods and techniques that may be used to meet those responsibilities.
(2) Its assurances that due process is accorded to institutions or programs seeking approval. The State agency:
(i) Provides for adequate discussion during the on-site visit between the visiting team and the faculty, administrative staff, students, and other appropriate persons;
(ii) Furnishes as a result of the evaluation visit, a written report to the institution or program commenting on areas of strength, areas needing improvement, and, when appropriate, suggesting means of improvement and including specific areas, if any, where the institution or program may not be in compliance with the agency's standards;
(iii) Provides the chief executive officer of the institution or program with opportunity to comment upon the written report and to file supplemental materials pertinent to the facts and conclusions in the written report of the visiting team before the agency takes action on the report;
(iv) Provides the chief executive officer of the institution with a specific statement of reasons for any adverse action, and notice of the right to appeal such action before an appeal body designated for that purpose;
(v) Publishes rules of procedure regarding appeals;
(vi) Continues the approval status of the institution or program pending disposition of an appeal;
(vii) Furnishes the chief executive officer of the institution or program with a written decision of the appeal body,
(c)
(i) Promotes a well-defined set of ethical standards governing institutional or programmatic practices, including recruitment, advertising, transcripts, fair and equitable student tuition refunds, and student placement services;
(ii) Maintains appropriate review in relation to the ethical practices of each approved institution or program.
Sec. 1203 of the Higher Education Act of 1965, as amended by Pub. L. 96-374 (20 U.S.C. 1143), unless otherwise noted.
(a) A State shall enter into an agreement with the Secretary if it wishes to participate in the following programs authorized by the Higher Education Act of 1965, as amended: The Continuing Education Outreach program, title I-B, with the exception of sections 116 and 117 of the Act; the State Student Incentive Grant program, subpart 3 of title IV-A of the Act; and the Undergraduate Academic Facilities Grant program, title VII-A of the Act. The agreement must contain assurances relating to administration, financial management, treatment of applicants for subgrants and contracts, supplement, not supplant requirements, and planning. These assurances are listed in subpart B of this part. The means by which these assurances will be met must also be described.
(b) The provisions of the agreement replace comparable provisions in annual plans previously required by each applicable program.
The following regulations apply to Federal-State relationship agreements:
(a) The Education Department General Administrative Regulations (EDGAR) in 34 CFR part 76 (State Administered Programs) and 34 CFR part 77 (Definitions).
(b) The regulations in this part 604.
(a)
(b)
The agreement shall contain the following assurances and a description of the means by which they will be met:
(a) Management practices and procedures will assure proper and efficient
(b) Appropriate fiscal control and fund accounting procedures will be provided for Federal funds received under all titles of the Act.
(c) Federal funds under the applicable programs will not supplant non-Federal funds.
(d) Equitable and appropriate criteria will be used in evaluating applications for subgrants or proposals for contracts under each applicable program.
(a) The agreement shall contain an assurance by the State that it has a comprehensive planning or policy formulation process which:
(1) Considers the relationship between State administration of each applicable program and administration of similar State programs or processes;
(2) Encourages State policies that consider the effects of declining enrollments on all sectors of postsecondary education within the State;
(3) Considers the postsecondary educational needs of unserved and underserved individuals within the State, including individuals beyond traditional college age;
(4) Considers the resources of public and private institutions, organizations, and agencies within the State that are capable of providing postsecondary educational opportunities; and
(5) Provides for direct, equitable, and active participation in the comprehensive planning or policy formulation processes by representatives of institutions of higher education—including community colleges, proprietary institutions, and independent colleges and universities—other providers of postsecondary education services, students, and the general public in the State.
(i) Participation shall be achieved through membership on State planning commissions, State advisory councils, or other State entities established by the State to conduct federally assisted comprehensive planning or policy formulation.
(ii) Participation shall be consistent with State law.
(b) The agreement shall include a description of the planning or policy formulation process through which these assurances will be fulfilled.
(a) The agreement shall remain in effect until substantial changes in administrative practices or planning processes would require its modification.
(b) Routine organizational or personnel changes are not subject to prior modification of the agreement, but information concerning these changes shall be promptly communicated to the Secretary.
(a) If the Secretary finds that there is a failure to comply substantially with the assurances of § 604.10 then the Secretary, after giving a State reasonable notice and the opportunity for a hearing, shall notify the State that it is ineligible to participate in any applicable program.
(b) To regain eligibility, a State must satisfy the Secretary that the failure to comply has been remedied.
20 U.S.C. 1101
The purpose of the Developing Hispanic-Serving Institutions Program is to provide grants to eligible institutions of higher education to—
(a) Expand educational opportunities for, and improve the academic attainment of, Hispanic students; and
(b) Expand and enhance the academic offerings, program quality, and institutional stability of colleges and universities that are educating the majority of Hispanic college students and helping large numbers of Hispanic students and other low-income individuals complete postsecondary degrees.
(a) An institution of higher education is eligible to receive a grant under this part if—
(1) At the time of application, it has an enrollment of undergraduate full-time equivalent students that is at least 25 percent Hispanic students;
(2) It provides assurances that not less than 50 percent of its Hispanic students are low-income individuals;
(3) It has an enrollment of needy students as described in § 606.3(a), unless the Secretary waives this requirement under § 606.3(b);
(4) It has low average educational and general expenditures per full-time equivalent undergraduate student as described in § 606.4(a), unless the Secretary waives this requirement under § 606.4(c);
(5) It is legally authorized by the State in which it is located to be a junior college or to provide an educational program for which it awards a bachelor's degree; and
(6) It is accredited or preaccredited by a nationally recognized accrediting agency or association that the Secretary has determined to be a reliable authority as to the quality of education or training offered.
(b) A branch campus of a Hispanic-Serving institution is eligible to receive a grant under this part if—
(1) The institution as a whole meets the requirements of paragraphs (a)(3) through (a)(6) of this section; and
(2) The branch campus satisfies the requirements of paragraphs (a)(1) through (a)(4) of this section.
(c)(1) An institution that receives a grant under the Strengthening Institutions Program (34 CFR part 607) or the Strengthening Historically Black Colleges and Universities Program (34 CFR part 608) for a particular fiscal year is not eligible to receive a grant under this part for that same fiscal year, and may not relinquish its grant under
(2) A Hispanic-Serving institution under this part may not concurrently receive grant funds under the Strengthening Institutions Program, Strengthening Historically Black Colleges and Universities Program, or Strengthening Historically Black Graduate Institutions Program.
(a) Except as provided in paragraph (b) of this section, for the purpose of § 606.2(a)(3), an applicant institution has an enrollment of needy students if in the base year—
(1) At least 50 percent of its degree students received student financial assistance under one or more of the following programs: Federal Pell Grant, Federal Supplemental Educational Opportunity Grant, Federal Work-Study, and Federal Perkins Loan; or
(2) The percentage of its undergraduate degree students who were enrolled on at least a half-time basis and received Federal Pell Grants exceeded the median percentage of undergraduate degree students who were enrolled on at least a half-time basis and received Federal Pell Grants at comparable institutions that offer similar instruction.
(b) The Secretary may waive the requirement contained in paragraph (a) of this section if the institution demonstrates that—
(1) The State provides more than 30 percent of the institution's budget and the institution charges not more than $99.00 for tuition and fees for an academic year;
(2) At least 30 percent of the students served by the institution in the base year were students from low-income families;
(3) The institution substantially increases the higher education opportunities for low-income students who are also educationally disadvantaged, underrepresented in postsecondary education, or minority students;
(4) The institution substantially increases the higher education opportunities for individuals who reside in an area that is not included in a “metropolitan statistical area” as defined by the Office of Management and Budget and who are unserved by other postsecondary institutions; or
(5) The institution will, if granted the waiver, substantially increase the higher education opportunities for Hispanic Americans.
(c) For the purpose of paragraph (b) of this section, the Secretary considers “low-income” to be an amount which does not exceed 150 percent of the amount equal to the poverty level as established by the United States Bureau of the Census.
(d) Each year, the Secretary notifies prospective applicants of the low-income figures through a notice published in the
(a)(1) Except as provided in paragraph (b) of this section, for the purpose of § 606.2(a)(2), an applicant institution's average educational and general expenditures per full-time equivalent undergraduate student in the base year must be less than the average educational and general expenditures per full-time equivalent undergraduate student in that year of comparable institutions that offer similar instruction.
(2) For the purpose of paragraph (a)(1) of this section, the Secretary determines the average educational and general expenditure per full-time equivalent undergraduate student for institutions with graduate students that do not differentiate between graduate and undergraduate educational and general expenditures by discounting the graduate enrollment using a factor of 2.5 times the number of graduate students.
(b) Each year, the Secretary notifies prospective applicants through a notice in the
(c) The Secretary may waive the requirement contained in paragraph (a)
(1) The institution's failure to satisfy the criteria in paragraph (a) of this section was due to factors which, if used in determining compliance with those criteria, distorted that determination; and
(2) The institution's designation as an eligible institution under this part is otherwise consistent with the purposes of this part.
(d) For the purpose of paragraph (c)(1) of this section, the Secretary considers that the following factors may distort an institution's educational and general expenditures per full-time equivalent undergraduate student—
(1) Low student enrollment;
(2) Location of the institution in an unusually high cost-of-living area;
(3) High energy costs;
(4) An increase in State funding that was part of a desegregation plan for higher education; or
(5) Operation of high cost professional schools such as medical or dental schools.
(a) An institution applies to the Secretary to be designated an eligible institution under this part by first submitting an application to the Secretary in the form, manner, and time established by the Secretary. The application must contain—
(1) The information necessary for the Secretary to determine whether the institution satisfies the requirements of §§ 606.2, 606.3(a), and 606.4(a);
(2) Any waiver request under §§ 606.3(b) and 606.4(c); and
(3) Information or explanations justifying any requested waiver.
(b) An institution that wishes to receive a grant under this part must submit, as part of its application for that grant, an assurance that when it submits its application—
(1) Its enrollment of undergraduate full-time equivalent students is at least 25 percent Hispanic students; and
(2) Not less than 50 percent of its Hispanic students are low-income individuals.
The following regulations apply to the Developing Hispanic-Serving Institutions Program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs), except 34 CFR 75.128(a)(2) and 75.129(a) in the case of applications for cooperative arrangements.
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 606.
(a)
(b) The following definitions also apply to this part:
(1) Is permanent in nature;
(2) Offers courses for credit and programs leading to an associate or bachelor's degree; and
(3) Is autonomous to the extent that it has—
(i) Its own faculty and administrative or supervisory organization; and
(ii) Its own budgetary and hiring authority.
(1) Public junior or community colleges;
(2) Private nonprofit junior or community colleges;
(3) Public institutions that offer an educational program for which they offer a bachelor's degree; or
(4) Private nonprofit institutions that offer an educational program for which they offer a bachelor's degree.
(1) Economically disadvantaged families;
(2) Limited English proficiency families;
(3) Migrant worker families; or
(4) Families in which one or both of their parents have dropped out of secondary school.
(1) That admits as regular students persons who are beyond the age of compulsory school attendance in the State in which the institution is located and who have the ability to benefit from the training offered by the institution;
(2) That does not provide an educational program for which it awards a bachelor's degree (or an equivalent degree); and
(3) That—
(i) Provides an educational program of not less than 2 years that is acceptable for full credit toward such a degree; or
(ii) Offers a 2-year program in engineering, mathematics, or the physical or biological sciences, designed to prepare a student to work as a technician or at the semiprofessional level in engineering, scientific, or other technological fields requiring the understanding and application of basic engineering, scientific, or mathematical principles of knowledge.
(1) As indicated by—
(i) The most current edition of the Department's
(ii) The National Research Council's
(iii) Other standard statistical references, as announced annually in the
(2) As documented by national survey data submitted to and accepted by the Secretary on a case-by-case basis.
(a) A comprehensive development plan is an institution's strategy for achieving growth and self-sufficiency by strengthening its—
(1) Academic programs;
(2) Institutional management; and
(3) Fiscal stability.
(b) The comprehensive development plan must include the following:
(1) An analysis of the strengths, weaknesses, and significant problems of the institution's academic programs, institutional management, and fiscal stability.
(2) A delineation of the institution's goals for its academic programs, institutional management, and fiscal stability, based on the outcomes of the analysis described in paragraph (b)(1) of this section.
(3) Measurable objectives related to reaching each goal and timeframes for achieving the objectives.
(4) Methods and resources that will be used to institutionalize practices and improvements developed under the proposed project.
(5) Its five year plan to improve its services to Hispanic and other low-income students.
(a)(1) Under this part, the Secretary may award planning grants and two types of development grants, individual development grants and cooperative arrangement development grants.
(2) Planning grants may be awarded for a period not to exceed one year.
(3) Either type of development grant may be awarded for a period of five years.
(b)(1) An institution that received an individual development grant of five years may not subsequently receive another individual development grant for a period of two years from the date on which the five-year grant terminates.
(2) A cooperative arrangement grant is not considered to be an individual development grant under paragraph (b)(1) of this section.
(a)
(1) A comprehensive development plan described in § 606.8; and
(2) An application for a development grant.
(b)
(1) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional and research purposes.
(2) Construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other instructional facilities.
(3) Support of faculty exchanges, faculty development, curriculum development, academic instruction, and faculty fellowships to assist in attaining advanced degrees in the fellow's field of instruction.
(4) Purchase of library books, periodicals, and other educational materials, including telecommunications program material.
(5) Tutoring, counseling, and student service programs designed to improve academic success.
(6) Funds management, administrative management, and acquisition of equipment for use in strengthening funds management.
(7) Joint use of facilities, such as laboratories and libraries.
(8) Establishing or improving a development office to strengthen or improve contributions from alumni and the private sector.
(9) Establishing or improving an endowment fund, provided the grantee uses no more than 20 percent of its grant funds for this purpose and at least matches those grant funds with non-Federal funds.
(10) Creating or improving facilities for Internet or other distance learning academic instruction capabilities, including purchase or rental of telecommunications technology equipment or services.
(11) Establishing or enhancing a program of teacher education designed to qualify students to teach in public elementary or secondary schools.
(12) Establishing community outreach programs that will encourage elementary school and secondary school students to develop the academic skills and the interest to pursue postsecondary education.
(13) Expanding the number of Hispanic and other underrepresented graduate and professional students that can
(14) Other activities that contribute to carrying out the purposes of this program.
(c)
(1) Activities that are not included in the grantee's approved application.
(2) Activities that are inconsistent with any State plan for higher education that is applicable to the institution, including, but not limited to, a State plan for desegregation of higher education.
(3) Activities or services that relate to sectarian instruction or religious worship.
(4) Activities provided by a school or department of divinity. For the purpose of this provision, a “school or department of divinity” means an institution, or a department of an institution, whose program is specifically for the education of students to prepare them to become ministers of religion or to enter into some other religious vocation or to prepare them to teach theological subjects.
(5) Developing or improving non-degree or non-credit courses other than basic skills development courses.
(6) Developing or improving community-based or community services programs, unless the program provides academic-related experiences or academic credit toward a degree for degree students, or, unless it is a program or services to encourage elementary and secondary school students to develop the academic skills and the interest to pursue postsecondary education.
(7) Purchase of standard office equipment, such as furniture, file cabinets, bookcases, typewriters, or word processors.
(8) Payment of any portion of the salary of a president, vice president, or equivalent officer who has college-wide administrative authority and responsibility at an institution to fill a position under the grant such as project coordinator or activity director.
(9) Costs of organized fund-raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions.
(10) Costs of student recruitment such as advertisements, literature, and college fairs.
(11) Services to high school students, unless they are services to encourage such students to develop the skills and the interest to pursue postsecondary education.
(12) Instruction in the institution's standard courses as indicated in the institution's catalog.
(13) Costs for health and fitness programs, transportation, and day care services.
(14) Student activities such as entertainment, cultural, or social enrichment programs, publications, social clubs, or associations.
(15) Activities that are operational in nature rather than developmental in nature.
(d)
(1) The definition of the term “endowment fund income” in § 628.6 of this chapter does not apply. For the purposes of this paragraph (d), “endowment fund income” means an amount equal to the total value of the fund, including fund appreciation and retained interest and dividends, minus the endowment fund corpus;
(2) Instead of the requirement in § 628.10(a) of this chapter, the grantee institution must match each dollar of Federal grant funds used to establish or increase an endowment fund with one dollar of non-Federal funds; and
(3) Instead of the requirements in § 628.41(a)(3) through (a)(5) and the introductory text in § 628.41(b) and § 628.41(b)(2) and (b)(3) of this chapter, if a grantee institution decides to use any of its grant funds for endowment purposes, it must match those grant funds immediately with non-Federal funds when it places those funds into its endowment fund.
In addition to the information needed by the Secretary to determine whether the institution should be awarded a grant under the funding criteria contained in subpart C, an application for a development grant must include—
(a) The institution's comprehensive development plan;
(b) A description of the relationship of each activity for which grant funds are requested to the relevant goals and objectives of its plan;
(c) A description of any activities that were funded under previous development grants awarded under the Developing Hispanic-Serving Institutions Program that expired within five years of when the development grant will begin and the institution's justification for not completing the activities under the previous grant, if applicable;
(d) If the applicant is applying to carry out more than one activity—
(1) A description of those activities that would be a sound investment of Federal funds if funded separately;
(2) A description of those activities that would be a sound investment of Federal funds only if funded with the other activities; and
(3) A ranking of the activities in preferred funding order.
(a)(1) Institutions applying for a cooperative arrangement grant shall submit only one application for that grant regardless of the number of institutions participating in the cooperative arrangement.
(2) The application must include the names of each participating institution, the role of each institution, and the rationale for each eligible participating institution's decision to request grant funds as part of a cooperative arrangement rather than as an individual grantee.
(b) If the application is for a development grant, the application must contain—
(1) Each participating institution's comprehensive development plan;
(2) The information required under § 606.11; and
(3) An explanation from each eligible participating institution of why participation in a cooperative arrangement grant rather than performance under an individual grant will better enable it to meet the goals and objectives of its comprehensive development plan at a lower cost.
(4) The name of the applicant for the group that is legally responsible for—
(i) The use of all grant funds; and
(ii) Ensuring that the project is carried out by the group in accordance with Federal requirements.
In any fiscal year, an institution of higher education may—
(a) Submit an application for an individual development grant; and
(b) Be part of a cooperative arrangement application.
(a) The Secretary evaluates an application on the basis of the criteria in—
(1) Sections 606.21 and 606.23 for a planning grant; and
(2) Sections 606.22, 606.23, 600.24, and 606.25 for a development grant.
(b)(1) The Secretary awards up to 100 points for the criteria in § 606.21 and up to 100 points for the criteria in § 606.22.
(2) The maximum possible score for each complete criterion is in parentheses.
(c)(1) The Secretary considers funding an application for a planning grant that scores at least 50 points under § 606.21.
(2) The Secretary considers funding an application for a development grant that—
(i) Scores at least 50 points under § 606.22;
(ii) Is submitted with a comprehensive development plan that satisfies all the elements required of such a plan under § 606.8; and
(iii) In the case of an application for a cooperative arrangement grant, demonstrates that the grant will enable each eligible participant to meet the goals and objectives of its comprehensive development plan better and at a lower cost than if each eligible participant were funded individually.
The Secretary uses the following criteria to evaluate an application to determine whether the applicant will produce a good comprehensive development plan and a fundable application:
(a)
(1) The planning process is clearly and comprehensively described and based on sound planning practice (15 points);
(2) The president or chief executive officer, administrators and other institutional personnel, students, and governing board members systematically and consistently will be involved in the planning process (15 points);
(3) The applicant will use its own resources to help implement the project (10 points); and
(4) The planning process is likely to achieve its intended results (20 points).
(b)
(1) The past experience and training of key personnel such as the project coordinator and persons who have key roles in the planning process are suitable to the tasks to be performed (10 points); and
(2) The time commitments of key personnel are adequate (10 points).
(c)
(1) The procedures for managing the project are likely to ensure effective and efficient project implementation (10 points); and
(2) The project coordinator has sufficient authority, including access to the president or chief executive officer, to conduct the project effectively (5 points).
(d)
The Secretary uses the following criteria to evaluate applications for development grants:
(a)
(1) The strengths, weaknesses, and significant problems of the institution's academic programs, institutional management, and fiscal stability are clearly and comprehensively analyzed and result from a process that involved major constituencies of the institution. (12 points);
(2) The goals for the institution's academic programs, institutional management, and fiscal stability are realistic and based on comprehensive analysis. (5 points);
(3) The objectives stated in the plan are measurable, related to institutional goals, and, if achieved, will contribute to the growth and self-sufficiency of the institution (5 points);
(4) The plan clearly and comprehensively describes the methods and resources the institution will use to institutionalize practice and improvements developed under the proposed project, including, in particular, how
(b)
(1) Realistic and defined in terms of measurable results (5 points); and
(2) Directly related to the problems to be solved and to the goals of the comprehensive development plan (5 points).
(c)
(1) The implementation strategy for each activity is comprehensive (10 points);
(2) The rationale for the implementation strategy for each activity is clearly described and is supported by the results of relevant studies or projects (10 points); and
(3) The timetable for each activity is realistic and likely to be attained (5 points).
(d)
(1) The past experience and training of key professional personnel are directly related to the stated activity objectives (7 points); and
(2) The time commitment of key personnel is realistic (3 points).
(e)
(1) Procedures for managing the project are likely to ensure efficient and effective project implementation (5 points); and
(2) The project coordinator and activity directors have sufficient authority to conduct the project effectively, including access to the president or chief executive officer (5 points).
(f)
(1) The data elements and the data collection procedures are clearly described and appropriate to measure the attainment of activity objectives and to measure the success of the project in achieving the goals of the comprehensive development plan (5 points); and
(2) The data analysis procedures are clearly described and are likely to produce formative and summative results on attaining activity objectives and measuring the success of the project on achieving the goals of the comprehensive development plan (5 points).
(g)
(a) If funds are available to fund only one additional planning grant and each of the next fundable applications has received the same number of points under § 606.21, the Secretary awards additional points, up to a maximum of two points, to any of those applicants that—
(1) Has an endowment fund of which the current market value, per full-time equivalent enrolled student, is less than the average current market value of the endowment funds, per full-time equivalent enrolled student, at similar type institutions; (one point) or
(2) Has expenditures for library materials per full-time equivalent enrolled student which are less than the average expenditure for library materials per full-time equivalent enrolled student at similar type institutions. (one point)
(b) If funds are available to fund only one additional development grant and each of the next fundable applications has received the same number of points under § 606.22, the Secretary will award additional points, up to a maximum of three points, to any of those applicants that—
(1) Has an endowment fund of which the current market value, per full-time equivalent enrolled student, is less than the average current market value of the endowment funds, per full-time equivalent enrolled student, at comparable institutions that offer similar instruction; (one point)
(2) Has expenditures for library materials per full-time equivalent enrolled student that are less than the average expenditures for library materials per full-time equivalent enrolled student at comparable institutions that offer similar instruction (one point); or
(3) Propose to carry out one or more of the following activities—
(i) Faculty development;
(ii) Funds and administrative management;
(iii) Development and improvement of academic programs;
(iv) Acquisition of equipment for use in strengthening management and academic programs;
(v) Joint use of facilities; and
(vi) Student services. (one point)
(c) As used in this section, an “endowment fund” does not include any fund established or supported under 34 CFR part 628.
(d) Each year, the Secretary provides prospective applicants with the average market value of endowment funds and the average expenditure of library materials per full-time equivalent student.
(e) The Secretary gives priority to each application that contains satisfactory evidence that the applicant has entered into or will enter into a collaborative arrangement with at least one local educational agency or community-based organization to provide that agency or organization with assistance (from funds other than funds provided under this part) in—
(1) Reducing the dropout rates of Hispanic students;
(2) Improving rates of academic achievement of Hispanic students; and
(3) Increasing the rates at which Hispanic high school graduates enroll in higher education.
(a)(1) In addition to evaluating an application under the selection criteria in § 606.22, the Secretary evaluates an applicant's performance under any previous development grant awarded under the Developing Hispanic-Serving Institutions Program that expired within five years of the year when the development grant will begin.
(2) The Secretary evaluates whether the applicant fulfilled, or is making substantial progress toward fulfilling, the goals and objectives of the previous grant, including, but not limited to, the applicant's success in institutionalizing practices developed and improvements made under the grant.
(3) The Secretary bases the evaluation of the applicant's performance on information contained in—
(i) Performance and evaluation reports submitted by the applicant;
(ii) Audit reports submitted on behalf of the applicant; and
(iii) Other information obtained by the Secretary, including reports prepared by the Department.
(b) If the Secretary initially determines that the applicant did not fulfill the goals and objectives of a previous grant or is not making substantial progress towards fulfilling those goals and objectives, the Secretary affords the applicant the opportunity to respond to that initial determination.
(c) If the Secretary determines that the applicant did not fulfill the goals and objectives of a previous grant or is not making substantial progress towards fulfilling those goals and objectives, the Secretary may—
(1) Decide not to fund the applicant; or
(2) Fund the applicant but impose special grant terms and conditions, such as specific reporting and monitoring requirements.
Among applications for cooperative arrangement grants, the Secretary gives priority to proposed cooperative arrangements that are geographically and economically sound, or will benefit the institutions applying for the grant.
(a)
(b)
(c)
(a) A grantee shall maintain its eligibility under the requirements in § 606.2, except for § 606.2(a)(3) and (4), for the duration of the grant period.
(b) The Secretary reviews an institution's application for a continuation award to ensure that—
(1) The institution continues to meet the eligibility requirements described in paragraph (a) of this section; and
(2) The institution is making substantial progress toward achieving the objectives described in its grant application including, if applicable, the institution's success in institutionalizing practices and improvements developed under the grant.
20 U.S.C. 1057-1059c, 1066-1069f, unless otherwise noted.
The purpose of the Strengthening Institutions Program is to provide grants to eligible institutions of higher education to improve their academic programs, institutional management, and fiscal stability in order to increase their self-sufficiency and strengthen their capacity to make a substantial contribution to the higher education resources of the Nation.
(a) Except as provided in paragraphs (b) and (c) of this section, an institution of higher education is eligible to receive a grant under the Strengthening Institutions Program if—
(1) It has an enrollment of needy students as described in § 607.3(a), unless the Secretary waives this requirement under § 607.3(b);
(2) It has low average educational and general expenditures per full-time equivalent undergraduate student as described in § 607.4(a), unless the Secretary waives this requirement under § 607.4(c).
(3) It is legally authorized by the State in which it is located to be a junior college or to provide an educational program for which it awards a bachelor's degree; and
(4) It is accredited or preaccredited by a nationally recognized accrediting agency or association that the Secretary has determined to be a reliable authority as to the quality of education or training offered.
(b) A branch campus of an institution of higher education, if the institution as a whole meets the requirements of paragraphs (a)(1) through (4) of this section, is eligible to receive a grant under the Strengthening Institutions Program even if, by itself, it does not satisfy the requirements of paragraphs (a)(3) and (a)(4) of this section, although the branch must meet the requirements of paragraphs (a)(1) and (a)(2) of this section.
(c) For the purpose of paragraphs (e)(2) and (f)(2) of this section, an institution's enrollment consists of a head count of its entire student body.
(d) A tribal college or university may receive a grant authorized under section 316 of the HEA if—
(1) It satisfies the requirements of paragraph (a) of this section, other than § 607.2(a)(3), and
(2)(i) It meets the definition of the term “tribally controlled college or university” in section 2 of the Tribally Controlled College or University Assistance Act of 1978; or
(ii) It is listed in the Equity in Educational Land Grant Status Act of 1994.
(e) An Alaska Native-serving institution may receive a grant under section 317 of the HEA if—
(1) It satisfies the requirements of paragraph (a) of this section; and
(2) It has, at the time of application, an enrollment of undergraduate students that is at least 20 percent Alaska Native students.
(f) A Native Hawaiian-serving institution may receive a grant authorized under section 317 of the HEA if—
(1) It satisfies the requirements of paragraph (a) of this section; and
(2) It has, at the time of application, an enrollment of undergraduate students that is at least 10 percent Native Hawaiian students.
(g)(1) An institution that qualifies for a grant under the Strengthening Historically Black Colleges and Universities Program (34 CFR part 608) or the Developing Hispanic-Serving Institutions Program (34 CFR part 606) and receives a grant under either of these programs for a particular fiscal year is not eligible to receive a grant under this part for the same fiscal year.
(2) A tribal college or university that receives a grant under section 316 of the HEA or an Alaska Native or Native Hawaiian-serving institution that receives a grant under section 317 of the HEA may not concurrently receive other grant funds under the Strengthening Institutions Program, Strengthening Historically Black Colleges and Universities Program, or Strengthening Historically Black Graduate Institutions Program.
(a) Except as provided in paragraph (b) of this section, for the purpose of § 607.2(a)(1), an applicant institution has an enrollment of needy students if in the base year—
(1) At least 50 percent of its degree students received student financial assistance under one or more of the following programs: Pell Grant, Supplemental Educational Opportunity Grant, College Work-Study, and Perkins Loan; or
(2) The percentage of its undergraduate degree students who were enrolled on at least a half-time basis and received Pell Grants exceeded the median percentage of undergraduate degree students who were enrolled on at least a half-time basis and received Pell Grants at comparable institutions that offer similar instruction.
(b) The Secretary may waive the requirement contained in paragraph (a) of this section if the institution demonstrates that—
(1) The State provides more than 30 percent of the institution's budget and the institution charges not more than $99.00 for tuition and fees for an academic year;
(2) At least 30 percent of the students served by the institution in the base year were students from low-income families;
(3) The institution substantially increases the higher education opportunities for low-income students who are also educationally disadvantaged, underrepresented in postsecondary education, or minority students;
(4) The institution substantially increases the higher education opportunities for individuals who reside in an area that is not included in a “metropolitan statistical area” as defined by the Office of Management and Budget and who are unserved by other postsecondary institutions;
(5) The institution is located on or within 50 miles of an Indian reservation, or a substantial population of Indians and the institution will, if granted the waiver, substantially increase higher education opportunities for American Indians;
(6) It is a tribal college or university; or
(7) The institution will, if granted the waiver, substantially increase the higher education opportunities for Black Americans, Hispanic Americans, Native Americans, Asian Americans or Pacific Islanders, including Native Hawaiians.
(c) For the purpose of paragraph (b) of this section, the Secretary considers “low-income” to be an amount which does not exceed 150 percent of the amount equal to the poverty level as established by the United States Bureau of the Census.
(d) Each year, the Secretary notifies prospective applicants through a notice in the
(a)(1) Except as provided in paragraph (b) of this section, for the purpose of § 6072(a)(2), an applicant institution's average educational and general expenditures per full-time equivalent undergraduate student in the base year must be less than the average educational and general expenditures per full-time equivalent undergraduate student of comparable institutions that offer similar institution in that year.
(2) For the purpose of paragraph (a)(1) of this section, the Secretary determines the average educational and general expenditure per FTE undergraduate student for institutions with graduate students that do not differentiate between graduate and undergraduate E&G expenditures by discounting the graduate enrollment using a factor of 2.5 times the number of graduate students.
(b) Each year, the Secretary notifies prospective applicants through a notice in the
(c) The Secretary may waive the requirement contained in paragraph (a) of this section, if the Secretary determines, based upon persuasive evidence provided by the institution, that—
(1) The institution's failure to satisfy the criteria in paragraph (a) of this section was due to factors which, if used in determining compliance with those criteria, distorted that determination; and
(2) The institution's designation as an eligible institution under this part is otherwise consistent with the purposes of this part.
(d) For the purpose of paragraph (c)(1) of this section, the Secretary considers that the following factors
(1) Low student enrollment;
(2) Location of the institution in an unusually high cost-of-living area;
(3) High energy costs;
(4) An increase in State funding that was part of a desegregation plan for higher education; or
(5) Operation of high cost professional schools such as medical or dental schools.
An institution shall apply to the Secretary to be designated an eligible institution under the Strengthening Institutions Program by submitting an application to the Secretary in the form, manner and time established by the Secretary. The application must contain—
(a) The information necessary for the Secretary to determine whether the institution satisfies the requirements of §§ 607.2, 607.3(a) and 607.4(a);
(b) Any waiver request under §§ 607.3(b) and 607.4(c); and
(c) Information or explanations justifying any requested waiver.
The following regulations apply to the Strengthening Institutions Program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs), except 34 CFR 75.128(a)(2) and 75.129(a) in the case of applications for cooperative arrangements.
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 607.
(a)
(b) The following term used in this part is defined in section 312 of the HEA:
(c) The following terms used in this part are defined in section 316 of the HEA:
(d) The following terms used in this part are defined in section 317 of the HEA:
(e) The following definitions also apply to this part:
(1) Is permanent in nature;
(2) Offers courses for credit and programs leading to an associate or bachelor's degree; and
(3) Is autonomous to the extent that it has—
(i) Its own faculty and administrative or supervisory organization; and
(ii) Its own budgetary and hiring authority.
(1) Public junior or community colleges;
(2) Private nonprofit junior or community colleges;
(3) Public institutions that offer an educational program for which they offer a bachelor's degree; or
(4) Private nonprofit institutions that offer an educational program for which they offer a bachelor's degree.
(1) Economically disadvantaged families;
(2) Limited English proficiency families;
(3) Migrant worker families; or
(4) Families in which one or both of their parents have dropped out of secondary school.
(1) That admits as regular students persons who are beyond the age of compulsory school attendance in the State in which the institution is located and who have the ability to benefit from the training offered by the institution;
(2) That does not provide an educational program for which it awards a bachelor's degree (or an equivalent degree); and
(3) That—
(i) Provides an educational program of not less than 2 years that is acceptable for full credit toward such a degree, or
(ii) Offers a 2-year program in engineering, mathematics, or the physical or biological sciences, designed to prepare a student to work as a technician or at the semiprofessional level in engineering, scientific, or other technological fields requiring the understanding and application of basic engineering, scientific, or mathematical principles of knowledge.
(1) As indicated by—
(i) The most current edition of the Department's
(ii) The National Research Council's
(iii) Other standard statistical references, as announced annually in the
(2) As documented by national survey data submitted to and accepted by the Secretary on a case-by-case basis.
(a) A comprehensive development plan is an institution's strategy for achieving growth and self-sufficiency by strengthening its—
(1) Academic programs;
(2) Institutional management; and
(3) Fiscal stability.
(b) The comprehensive development plan must include the following:
(1) An analysis of the strengths, weaknesses, and significant problems of the institution's academic programs, institutional management, and fiscal stability.
(2) A delineation of the institution's goals for its academic programs, institutional management, and fiscal stability, based on the outcomes of the analysis described in paragraph (b)(1) of this section.
(3) Measurable objectives related to reaching each goal and timeframes for achieving the objectives.
(4) Methods and resources that will be used to institutionalize practices and improvements developed under the proposed project.
(5) For a grant under section 316 of the HEA to a tribal college or university, its five-year plan for improving its services to Indian students, increasing the rates at which Indian secondary school students enroll in higher education, and increasing overall postsecondary retention rates for Indian students.
(6) For a grant under section 317 of the HEA to an Alaska Native-serving institution or to a Native Hawaiian-serving institution, its five-year plan for improving its services to Alaska Native or Native Hawaiian students, respectively.
(a)(1) Under this part, the Secretary may award planning grants and two types of development grants, individual development grants and cooperative arrangement development grants.
(2) Planning grants may be awarded for a period not to exceed one year.
(3) Either type of development grant may be awarded for a period of five years.
(b)(1) An institution that received an individual development grant of five years may not subsequently receive another individual development grant for a period of two years from the date on which the five-year grant period terminates.
(2) A cooperative arrangement grant is not considered to be an individual development grant under paragraph (b)(1) of this section.
(a)
(1) A comprehensive development plan described in § 607.8; and
(2) An application for a development grant.
(b)
(1) Faculty exchanges, faculty fellowships, and faculty development that provide faculty with the skills and knowledge needed to—
(i) Develop academic support services, including advising and mentoring students;
(ii) Develop academic programs or methodology, including computer-assisted instruction, that strengthen the academic quality of the institution; or
(iii) Acquire terminal degrees that are required to obtain or retain accreditation of an academic program or department;
(2) Funds and administrative management that will improve the institution's ability to—
(i) Manage financial resources in an efficient and effective manner; and
(ii) Collect, access, and use information about the institution's operations for improved decisionmaking;
(3) Developing and improving academic programs that enable the institution to—
(i) Develop new academic programs or new program options that show promise for increased student enrollment;
(ii) Provide new technology or methodology to increase student success and retention or to retain accreditation; or
(iii) Improve curriculum or methodology for existing academic programs to stabilize or increase student enrollment;
(4) Acquiring equipment for use in strengthening management and academic programs to achieve objectives
(5) Establishing or increasing the joint use of facilities such as libraries and laboratories to—
(i) Eliminate the distance and high cost associated with providing academic programs and academic support; or
(ii) Provide clinical experience that is part of an approved academic program at off-campus locations;
(6) Developing or improving student services to provide—
(i) New or improved methods to deliver student services, including counseling, tutoring, and instruction in basic skills; or
(ii) Improved strategies to train student services personnel;
(7) Payment of any portion of the salary of a dean, with proper justification, to fill a position under the project such as project coordinator or activity director. For purposes of this paragraph, proper justification includes evidence that the position entitled “Dean” is not one that has college-wide administrative authority and responsibility;
(8) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional and research purposes;
(9) Construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other instructional facilities, including the integration of computer technology into institutional facilities to create smart buildings;
(10) Establishing or improving a development office to strengthen or improve contributions from alumni and the private sector;
(11) Establishing or improving an endowment fund, provided a grantee uses no more than 20 percent of its grant funds for this purpose and at least matches those grant funds with non-Federal funds;
(12) Creating or improving facilities for Internet or other distance learning academic instruction capabilities, including purchase or rental of telecommunications technology equipment or services;
(13) For grants authorized under section 316 of the HEA to tribal colleges or universities—
(i) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional and research purposes;
(ii) Construction, maintenance, renovation, and improvement in classroom, library, laboratory, and other instructional facilities, including purchase or rental of telecommunications technology equipment or services;
(iii) Support of faculty exchanges, faculty development, and faculty fellowships to assist in attaining advanced degrees in their field of instruction;
(iv) Curriculum development and academic instruction;
(v) Purchase of library books, periodicals, microfilm, and other educational materials, including telecommunications program materials;
(vi) Funds and administrative management, and acquisition of equipment for use in strengthening funds management;
(vii) Joint use of facilities such as laboratories and libraries; and
(viii) Academic tutoring and counseling programs and student support services designed to improve academic services;
(ix) Academic instruction in disciplines in which Indians are underrepresented;
(x) Establishing or improving a development office to strengthen or improve contributions from the alumni and the private sector;
(xi) Establishing or enhancing a program of teacher education designed to qualify students to teach in elementary schools or secondary schools, with a particular emphasis on teaching Indian children and youth, that shall include, as part of such program, preparation for teacher certification;
(xii) Establishing community outreach programs that encourage Indian elementary school and secondary school students to develop the academic skills and the interest to pursue postsecondary education; and
(xiii) Establishing or improving an endowment fund, provided a grantee uses no more than 20 percent of its grant funds for this purpose and at least matches those grant funds with non-Federal funds; or
(14) For grants authorized under section 317 of the HEA to Alaska Native-serving institutions and Native Hawaiian-serving institutions—
(i) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional and research purposes;
(ii) Renovation and improvement in classroom, library, laboratory, and other instructional facilities;
(iii) Support of faculty exchanges, faculty development, and faculty fellowships to assist in attaining advanced degrees in the faculty's field of instruction;
(iv) Curriculum development and academic instruction;
(v) Purchase of library books, periodicals, microfilm, and other educational materials;
(vi) Funds and administrative management, and acquisition of equipment for use in strengthening funds management;
(vii) Joint use of facilities such as laboratories and libraries;
(viii) Academic tutoring and counseling programs and student support services.
(c)
(1) Activities that are not included in the grantee's approved application.
(2) Activities that are inconsistent with any State plan for higher education that is applicable to the institution, including, but not limited to, a State plan for desegregation of higher education.
(3) Activities or services that relate to sectarian instruction or religious worship.
(4) Activities provided by a school or department of divinity. For the purpose of this provision, a “school or department of divinity” means an institution, or a department of an institution, whose program is specifically for the education of students to prepare them to become ministers of religion or to enter into some other religious vocation or to prepare them to teach theological subjects.
(5) Developing or improving non-degree or non-credit courses other than basic skills development courses.
(6) Developing or improving community-based or community services programs, unless the program provides academic-related experiences or academic credit toward a degree for degree students, or unless it is an outreach program that encourages Indian elementary school and secondary school students to develop the academic skills and the interest to pursue postsecondary education.
(7) Purchase of standard office equipment, such as furniture, file cabinets, bookcases, typewriters, or word processors.
(8) Payment of any portion of the salary of a president, vice president, or equivalent officer who has college-wide administrative authority and responsibility at an institution to fill a position under the grant such as project coordinator or activity director.
(9) Costs of organized fund-raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions.
(10) Costs of student recruitment such as advertisements, literature, and college fairs.
(11) Services to high school students, unless they are part of a program to encourage Indian students to develop the academic skills and the interest to pursue postsecondary education.
(12) Instruction in the institution's standard courses as indicated in the institution's catalog.
(13) Costs for health and fitness programs, transportation, and day care services.
(14) Student activities such as entertainment, cultural, or social enrichment programs, publications, social clubs, or associations.
(15) Activities that are operational in nature rather than developmental in nature.
(d)
(1) The definition of the term “endowment fund income” in § 628.6 of this chapter does not apply. For the purposes of this paragraph (d), “endowment fund income” means an amount equal to the total value of the fund, including fund appreciation and retained interest and dividends, minus the endowment fund corpus.
(2) Instead of the requirement in § 628.10(a) of this chapter, the grantee institution must match each dollar of Federal grant funds used to establish or increase an endowment fund with one dollar of non-Federal funds; and
(3) Instead of the requirements in § 628.41(a)(3) through (a)(5) and the introductory text in § 628.41(b) and § 628.41(b)(2) and (b)(3) of this chapter, if a grantee institution decides to use any of its grant funds for endowment purposes, it must match those grant funds immediately with non-Federal funds when it places those funds into its endowment fund.
In addition to the information needed by the Secretary to determine whether the institution should be awarded a grant under the funding criteria contained in subpart C, an application for a development grant must include—
(a) The institution's comprehensive development plan;
(b) A description of the relationship of each activity for which grant funds are requested to the relevant goals and objectives of its plan;
(c) A description of any activities that were funded under previous development grants awarded under the Strengthening Institutions Program that expired within five years of when the development grant will begin and the institution's justification for not completing the activities under the previous grant, if applicable; and
(d) If the applicant is applying to carry out more than one activity—
(1) A description of those activities that would be a sound investment of Federal funds if funded separately;
(2) A description of those activities that would be a sound investment of Federal funds only if funded with the other activities; and
(3) A ranking of the activities in preferred funding order.
(a)(1) Institutions applying for a cooperative arrangement grant shall submit only one application for that grant regardless of the number of institutions participating in the cooperative arrangement.
(2) The application must include the names of each participating institution, the role of each institution, and the rationale for each eligible participating institution's decision to request grant funds as part of a cooperative arrangement rather than as an individual grantee.
(b) If the application is for a development grant, the application must contain—
(1) Each participating institution's comprehensive development plan;
(2) The information required under § 607.11; and
(3) An explanation from each eligible participating institution of why participation in a cooperative arrangement grant rather than performance under an individual grant will better enable it to meet the goals and objectives of its comprehensive development plan at a lower cost.
(4) The name of the applicant for the group that is legally responsible for—
(i) The use of all grant funds; and
(ii) Ensuring that the project is carried out by the group in accordance with Federal requirements.
In any fiscal year, an institution of higher education that meets the eligibility requirements under sections 311, 316, and 317 of the HEA may—
(a) Submit an application for a development grant authorized under sections 311, 316, and 317 of the HEA; and
(b) Be part of a cooperative arrangement application.
(a) The Secretary evaluates an application on the basis of the criteria in—
(1) Sections 607.21 and 607.23 for a planning grant; and
(2) Sections 607.22, 607.23, 607.24, and 607.25 for a development grant.
(b)(1) With regard to applicants that satisfy the requirements of paragraph (d) of this section, for each fiscal year, the Secretary awards individual development grants to applicants that are not individual development grantees under this part, before the Secretary awards an individual development grant to any applicant that is an individual grantee under this part.
(2) For purposes of paragraph (b)(1) of this section, an institution that is a recipient of a cooperative arrangement grant is not an individual grantee under this part.
(c)(1) The Secretary awards up to 100 points for the criteria in § 607.21 and up to 100 points for the criteria in § 607.22.
(2) The maximum possible score for each complete criterion is in parentheses.
(d)(1) The Secretary considers funding an application for a planning grant that scores at least 50 points under § 607.21.
(2) The Secretary considers funding an application for a development grant that—
(i) Scores at least 50 points under § 607.22;
(ii) Is submitted with a comprehensive development plan that satisfies all the elements required of such a plan under § 607.8; and
(iii) In the case of an application for a cooperative arrangement grant, demonstrates that the grant will enable each eligible participant to meet the goals and objectives of its comprehensive development plan better and at a lower cost than if each eligible participant were funded individually.
The Secretary uses the following criteria to evaluate an application to determine whether the applicant will produce a good comprehensive development plan and a fundable Strengthening Institutions Program application:
(a)
(1) The planning process is clearly and comprehensively described and based on sound planning practice (15 points);
(2) The president or chief executive officer, administrators and other institutional personnel, students, and governing board members systematically and consistently will be involved in the planning process (15 points);
(3) The applicant will use its own resources to help implement the project (10 points); and
(4) The planning process is likely to achieve its intended results (20 points).
(b)
(1) The past experience and training of key personnel such as the project coordinator and persons who have key roles in the planning process are suitable to the tasks to be performed (10 points); and
(2) The time commitments of key personnel are adequate (10 points).
(c)
(1) The procedures for managing the project are likely to ensure effective and efficient project implementation (10 points); and
(2) The project coordinator has sufficient authority, including access to the president or chief executive officer, to conduct the project effectively (5 points).
(d)
The Secretary uses the following criteria to evaluate applications for development grants:
(a)
(1) The strengths, weaknesses, and significant problems of the institution's academic programs, institutional management, and fiscal stability are clearly and comprehensively analyzed and result from a process that involved major constituencies of the institution. (12 points);
(2) The goals for the institution's academic programs, institutional management, and fiscal stability are realistic and based on comprehensive analysis. (5 points);
(3) The objectives stated in the plan are measurable, related to institutional goals, and, if achieved, will contribute to the growth and self-sufficiency of the institution (5 points);
(4) The plan clearly and comprehensively describes the methods and resources the institution will use to institutionalize practice and improvements developed under the proposed project, including, in particular, how operational costs for personnel, maintenance, and upgrades of equipment will be paid with institutional resources (8 points).
(b)
(1) Realistic and defined in terms of measurable results (5 points); and
(2) Directly related to the problems to be solved and to the goals of the comprehensive development plan (5 points).
(c)
(1) The implementation strategy for each activity is comprehensive (10 points);
(2) The rationale for the implementation strategy for each activity is clearly described and is supported by the results of relevant studies or projects (10 points); and
(3) The timetable for each activity is realistic and likely to be attained (5 points).
(d)
(1) The past experience and training of key professional personnel are directly related to the stated activity objectives (7 points); and
(2) The time commitment of key personnel is realistic (3 points).
(e)
(1) Procedures for managing the project are likely to ensure efficient and effective project implementation (5 points); and
(2) The project coordinator and activity directors have sufficient authority to conduct the project effectively, including access to the president or chief executive officer (5 points).
(f)
(1) The data elements and the data collection procedures are clearly described and appropriate to measure the
(2) The data analysis procedures are clearly described and are likely to produce formative and summative results on attaining activity objectives and measuring the success of the project on achieving the goals of the comprehensive development plan (5 points).
(g)
(a) If funds are available to fund only one additional planning grant and each of the next fundable applications has received the same number of points under § 607.21, the Secretary awards additional points, up to a maximum of two points, to any of those applicants that—
(1) Has an endowment fund of which the current market value, per full-time equivalent enrolled student, is less than the average current market value of the endowment funds, per full-time equivalent enrolled student, at similar type institutions; (one point) or
(2) Has expenditures for library materials per full-time equivalent enrolled student which is less than the average expenditure for library materials per full-time equivalent enrolled student at similar type institutions. (one point)
(b) If funds are available to fund only one additional development grant and each of the next fundable applications has received the same number of points under § 607.22, the Secretary will award additional points, up to a maximum of three points, to any of those applicants that—
(1) Has an endowment fund of which the current market value, per full-time equivalent enrolled student, is less than the average current market value of the endowment funds, per full-time equivalent enrolled student, at comparable institutions that offer similar instruction; (one point)
(2) Has expenditures for library materials per full-time equivalent enrolled student which are less than the average expenditures for library materials per full-time equivalent enrolled student at comparable institutions that offer similar instruction (one point); or
(3) Propose to carry out one or more of the following activities—
(i) Faculty development;
(ii) Funds and administrative management;
(iii) Development and improvement of academic programs;
(iv) Acquisition of equipment for use in strengthening management and academic programs;
(v) Joint use of facilities; and
(vi) Student services. (one point)
(c) As used in this section, an endowment fund does not include any fund established or supported under 34 CFR part 628.
(d) Each year, the Secretary provides prospective applicants with the average expenditure of endowment funds and library materials per full-time equivalent student.
(a)(1) In addition to evaluating an application under the selection criteria in § 607.22, the Secretary evaluates an applicant's performance under any previous development grant awarded under the Strengthening Institutions Program that expired within five years of the year when the development grant will begin.
(2) The Secretary evaluates whether the applicant fulfilled, or is making substantial progress toward fulfilling, the goals and objectives of the previous grant, including, but not limited to, the applicant's success in institutionalizing practices developed and improvements made under the grant.
(3) The Secretary bases the evaluation of the applicant's performance on information contained in—
(i) Performance and evaluation reports submitted by the applicant;
(ii) Audit reports submitted on behalf of the applicant; and
(iii) Other information obtained by the Secretary, including reports prepared by the Department.
(b) If the Secretary initially determines that the applicant did not fulfill the goals and objectives of a previous grant or is not making substantial progress towards fulfilling those goals and objectives, the Secretary affords the applicant the opportunity to respond to that initial determination.
(c) If the Secretary determines that the applicant did not fulfill the goals and objectives of a previous grant or is not making substantial progress towards fulfilling those goals and objectives, the Secretary may—
(1) Decide not to fund the applicant; or
(2) Fund the applicant but impose special grant terms and conditions, such as specific reporting and monitoring requirements.
Among applications for cooperative arrangement grants, the Secretary gives priority to proposed cooperative arrangements that are geographically and economically sound, or will benefit the institutions applying for the grant.
(a)
(b)
(c)
(a) A grantee shall maintain its eligibility under the requirements in § 607.2, except for § 607.2(a) (1) and (2), for the duration of the grant period.
(b) The Secretary reviews an institution's application for a continuation award to ensure that—
(1) The institution continues to meet the eligibility requirements described in paragraph (a) of this section; and
(2) The institution is making substantial progress toward achieving the objectives set forth in its grant application including, if applicable, the institution's success in institutionalizing practices and improvements developed under the grant.
20 U.S.C. 1060 through 1063a, 1063c, 1066, 1068, 1069c, 1069d, and 1069f, unless otherwise noted.
The Strengthening Historically Black Colleges and Universities Program, hereafter called the HBCU Program, provides grants to Historically Black Colleges and Universities (HBCUs) to assist these institutions in establishing and strengthening their physical plants, academic resources and student services so that they may continue to participate in fulfilling the goal of equality of educational opportunity.
(a) To be eligible to receive a grant under this part, an institution must—
(1) Satisfy section 322(2) of the Higher Education Act of 1965, as amended (HEA);
(2) Be legally authorized by the State in which it is located—
(i) To be a junior or community college; or
(ii) To provide an educational program for which it awards a bachelor's degree; and
(3) Be accredited or preaccredited by a nationally recognized accrediting agency or association.
(b) The Secretary has determined that the following institutions satisfy section 322(2) of the HEA.
(c) If an institution identified in paragraph (b) of this section has merged with another institution, and, as a result of the merger, would not otherwise qualify to receive a grant under this part, that institution may nevertheless qualify to receive a grant under this part if—
(1) The institution would have qualified to receive a grant before the merger; and
(2) The institution was eligible to receive a grant under the Special Needs Program in any fiscal year prior to fiscal year 1986. (The Special Needs Program was authorized under Title III, Part B, of the HEA before 1986.)
(d) For the purpose of paragraph (a)(3) of this section, the Secretary publishes a list in the
(e) Notwithstanding any other provision of this section, for each fiscal year—
(1) The University of the District of Columbia is eligible to receive a grant under this part only if the amount of the grant it is scheduled to receive under § 608.31 exceeds the amount it is scheduled to receive in the same fiscal year under the District of Columbia Self-Government and Governmental Reorganization Act; and
(2) Howard University is eligible to receive a grant under this part only if the amount of the grant it is scheduled to receive under § 608.31 exceeds the amount it is scheduled to receive in the same fiscal year under the Act of March 2, 1867, 20 U.S.C. 123.
The following regulations apply to this part:
(a) The Department of Education General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) The following sections of 34 CFR part 75 (Direct Grant Programs): §§ 75.1-75.104, 75.125-75.129, 75.190-75.192, 75.230-75.261, 75.500, 75.510-75.519, 75.524-75.534, 75.580-75.903, and 75.910;
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 608.
(a)
(b)
(i) Admits as regular students persons who are beyond the age of compulsory school attendance in the State in which the institution is located and who have the ability to benefit from the training offered by the institution;
(ii) Does not provide an educational program for which it awards a bachelor's degree or an equivalent degree; and
(iii) Provides an educational program of not less than 2 years that is acceptable for full credit toward such a degree; or offers a 2-year program in engineering, mathematics, or the physical or biological sciences, designed to prepare a student to work as a technician or at the semiprofessional level in engineering, scientific, or other technological fields requiring the understanding and application of basic engineering, scientific, or mathematical principles of knowledge.
(a)
(1) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional or research purposes;
(2) Construction, maintenance, renovation, and improvement in classroom, library, laboratory, and other instructional facilities, including purchase or rental of telecommunications technology equipment or services;
(3) Support of faculty exchanges, faculty development and faculty fellowships to assist these faculty members in attaining advanced degrees in their fields of instruction;
(4) Academic instruction in disciplines in which Black Americans are underrepresented;
(5) Purchase of library books, periodicals, microfilm, and other educational materials, including telecommunications program materials;
(6) Tutoring, counseling, and student service programs designed to improve academic success;
(7) Funds and administrative management, and acquisition of equipment for use in strengthening funds management;
(8) Joint use of facilities, such as laboratories and libraries;
(9) Establishing or improving a development office to strengthen or improve contributions from alumni and the private sector;
(10) Establishing or enhancing a program of teacher education designed to qualify students to teach in a public elementary or secondary school in the State that shall include, as part of the program, preparation for teacher certification;
(11) Establishing community outreach programs that will encourage elementary and secondary students to develop the academic skills and the interest to pursue postsecondary education; and
(12) Other activities that it proposes in its application that contribute to carrying out the purpose of this part and are approved by the Secretary as part of the review and acceptance of the application.
(b)
(1) Activities that are not included in the grantee's approved application;
(2) Activities described in paragraph (a)(12) of this section that are not approved by the Secretary;
(3) Activities that are inconsistent with any State plan of higher education that is applicable to the institution;
(4) Activities that are inconsistent with a State plan for desegregation of higher education that is applicable to the institution;
(5) Activities or services that relate to sectarian instruction or religious worship; and
(6) Activities provided by a school or department of divinity. For the purpose of this section, a “school or department of divinity” means an institution, or a department of an institution, whose program is specifically for the education of students to prepare them to become ministers of religion or to enter upon some other religious vocation, or to prepare them to teach theological subjects.
(c) No award under this part may be used for telecommunications technology equipment, facilities or services, if such equipment, facilities or services are available pursuant to section 396(k) of the Communications Act of 1934.
(d)
(1) The definition of the term “endowment fund income” in § 628.6 of this chapter does not apply. For the purposes of this paragraph (d), “endowment fund income” means an amount equal to the total value of the fund, including fund appreciation and retained interest and dividends, minus the endowment fund corpus;
(2) Instead of the requirement in § 628.10(a) of this chapter, the grantee institution must match each dollar of Federal grant funds used to establish or increase an endowment fund with one dollar of non-Federal funds; and
(3) Instead of the requirements in § 628.41(a)(3) through (a)(5) and the introductory text in § 628.41(b) and § 628.41(b)(2) and (b)(3) of this chapter, if a grantee institution decides to use any of its grant funds for endowment purposes, it must match those grant funds immediately with non-Federal funds when it places those funds into its endowment fund.
The Secretary may award a grant under this part for a period of up to five academic years.
In order to receive a grant under this part, an institution must submit an application to the Secretary at such time and in such manner as the Secretary may prescribe. The application must contain—
(a) A description of the activities to be carried out with grant funds;
(b) A description of how the grant funds will be used so that they will supplement and, to the extent practical, increase the funds that would otherwise be made available for the activities to be carried out under the grant and in no case supplant those funds;
(c) (1) A comprehensive development plan as described in § 608.21; or
(2) If an applicant has already submitted a comprehensive development plan as described in § 608.21, a description of the progress the applicant has made in carrying out the goals of its plan;
(d) An assurance that the institution will provide the Secretary with an annual report on the activities carried out under the grant;
(e) An assurance that the institution will provide for, and submit to the Secretary, the compliance and financial audit described in § 608.41;
(f) An assurance that the proposed activities in the application are in accordance with any State plan that is applicable to the institution;
(g) The number of graduates of the applicant institution during the school year immediately preceding the fiscal year for which grant funds are requested; and
(h) The number of graduates of the applicant institution—
(1) Who, within five years of graduating with baccalaureate degrees, attended graduate or professional schools and enrolled in degree programs in disciplines in which Blacks are underrepresented during the school year immediately preceding the fiscal year for which funds are requested; and
(2) Who graduated with baccalaureate degrees during any one of the five school years immediately preceding the school year described in paragraph (h)(1) of this section.
(a) A comprehensive development plan must describe an institution's strategy for achieving growth and self-sufficiency by strengthening its—
(1) Financial management;
(2) Academic programs; and
(b) The comprehensive development plan must include the following:
(1) An assessment of the strengths and weaknesses of the institution's financial management and academic programs.
(2) A delineation of the institution's goals for its financial management and academic programs, based on the outcomes of the assessment described in paragraph (b)(1) of this section.
(3) A listing of measurable objectives designed to assist the institution to reach each goal with accompanying timeframes for achieving the objectives.
(4) A description of methods, processes, and procedures that will be used by the college or university to institutionalize financial management and academic program practices and improvements developed under the proposed funded activities.
The Secretary—
(a) Approves any application that satisfies the requirements of § 608.10 and § 608.20; and
(b) Does not disapprove any application, or any modification of an application, without affording the applicant reasonable notice and opportunity for a hearing.
(a) Except as provided in paragraph (c) of this section, for each fiscal year, the Secretary determines the amount of a grant under this part by-
(1) Multiplying fifty percent of the amount appropriated for the HBCU Program by the following fraction:
(2) Multiplying twenty-five percent of the amount appropriated for the HBCU Program by the following fraction:
(3) Multiplying twenty-five percent of the amount appropriated for the HBCU Program by the following fraction:
(4) Adding the amounts obtained in paragraphs (a)(1), (a)(2), and (a)(3) of this section.
(b)(1) For each fiscal year, the numerator in paragraph (a)(3) of this section is calculated by—
(i) Determining the number of graduates of an applicant institution who, within five years of graduating with baccalaureate degrees, attended graduate or professional schools and enrolled in degree programs in disciplines in which Blacks are underrepresented during the school year immediately preceding that fiscal year; and
(ii) Dividing the number obtained in paragraph (b)(1)(i) of this section by the number of graduates of an applicant institution who graduated with baccalaureate degrees during the five school years immediately preceding the school year described in paragraph (b)(1)(i) of this section.
(2) For purposes of this section, the Secretary—
(i) Considers that Blacks are underrepresented in a professional or academic discipline if the percentage of Blacks in that discipline is less than the percentage of Blacks in the general population of the United States; and
(ii) Notifies applicants of the disciplines in which Blacks are underrepresented through a notice in the
(c) Notwithstanding the formula in paragraph (a) of this section—
(1) For each fiscal year, each eligible institution with an approved application must receive at least $500,000; and
(2) If the amount appropriated for a fiscal year for the HBCU Program is insufficient to provide $500,000 to each eligible institution with an approved application, each grant is ratably reduced. If additional funds become available for the HBCU Program during a fiscal year, each grant is increased on the same basis as it was decreased until the grant amount reaches $500,000.
(d) The amount of any grant that the Secretary determines will not be required by a grantee for the period for which the grant was made is available for reallotment by the Secretary during that period to other eligible institutions under the formula contained in paragraph (a) of this section.
(a)
(b)
(c)
(1) Spend more than fifty percent of its grant award in each fiscal year for costs relating to constructing or maintaining a classroom, library, laboratory, or other instructional facility; or
(2) Use an indirect cost rate to determine allowable costs under its grant.
(a) (1) A grantee shall provide for the conduct of a compliance and financial audit of any funds it receives under this part of a qualified, independent organization or person in accordance with the
(2) The grantee shall have an audit conducted at least once every two years, covering the period since the previous audit, and the grantee shall submit the audit to the Secretary.
(3) If a grantee is audited under Chapter 75 of Title 31 of the United States Code, the Secretary considers that audit to satisfy the requirements of paragraph (a)(1) of this section.
(b) An institution awarded a grant under this part must submit to the Department of Education Inspector General three copies of the audit required in paragraph (a) of this section within six months after completion of the audit.
(c) Any individual or firm conducting an audit described in this section shall give the Department of Education's Inspector General access to records or other documents necessary to review the results of the audit.
(d) A grantee shall repay to the Treasury of the United States any grant funds it received that it did not expend or use to carry out the allowable activities included in its approved application within ten years following the date of the initial grant it received under this part.
The Secretary terminates any grant under which funds were not expended if an institution loses—
(a) Its accredited status; or
(b) Its legal authority in the State in which it is located—
(1) To be a junior or community college; or
(2) To provide an educational program for which it awards a bachelor's degree.
20 U.S.C. 1063b and 1063c, unless otherwise noted.
The Strengthening Historically Black Graduate Institutions Program provides grants to the institutions listed in § 609.2 to assist these institutions in establishing and strengthening their physical plants, development offices, endowment funds, academic resources and student services so that they may continue to participate in fulfilling the goal of equality of educational opportunity in graduate education.
(a) An institution or an institution's qualified graduate program listed in paragraph (b) of this section is eligible to receive a grant under this part if the Secretary determines that the institution is making a substantial contribution to legal, medical, dental, veterinary or other graduate education opportunities for Black Americans.
(b) The institutions and programs referred to in paragraph (a) of this section are—
(1) Morehouse School of Medicine;
(2) Meharry Medical School;
(3) Charles R. Drew Postgraduate Medical School;
(4) Clark Atlanta University;
(5) Tuskegee Institute School of Veterinary Medicine;
(6) Xavier University School of Pharmacy;
(7) Southern University School of Law;
(8) Texas Southern University School of Law and School of Pharmacy;
(9) Florida A&M University School of Pharmaceutical Sciences;
(10) North Carolina Central University School of Law;
(11) Morgan State University's qualified graduate program;
(12) Hampton University's qualified graduate program;
(13) Alabama A&M's qualified graduate program;
(14) North Carolina A&T State University's qualified graduate program;
(15) University of Maryland Eastern Shore's qualified graduate program; and
(16) Jackson State University's qualified graduate program.
(c) An institution that was awarded a grant prior to October 1, 1992 may continue to receive grant payments, regardless of the eligibility of the graduate institutions described in paragraphs (b)(6) through (16) of this section, until the institution's grant period has expired or September 30, 1993, whichever is later.
(d) No institution of higher education or university system may receive more than one grant under this section in any fiscal year.
The following regulations apply to this part:
(a) The Department of Education General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) The following sections of 34 CFR part 75 (Direct Grant Programs): §§ 75.1-75.104, 75.125-75.129, 75.190-75.192, 75.230-75.261, 75.500, 75.510-75.519, 75.524-75.534, 75.580-75.903, and 75.901;
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants))
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 609.
(a)
(b) The following definition applies to a term used in this part:
(i) Provides a program of instruction in the physical or natural sciences, engineering, mathematics, or other scientific disciplines in which African Americans are underrepresented;
(ii) Has been accredited or approved by a nationally recognized accrediting agency or association. (The Secretary publishes a list in the
(iii) Has students enrolled in that program when the institution offering the program applies for a grant under this part.
(a)
(1) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional or research purposes;
(2) Construction, maintenance, renovation, and improvement in classroom, library, laboratory, and other instructional facilities, including purchase or rental of telecommunications technology equipment or services;
(3) Support of faculty exchanges, faculty development and faculty fellowships to assist these faculty members in attaining advanced degrees in their fields of instruction;
(4) Academic instruction in disciplines in which Black Americans are underrepresented;
(5) Purchase of library books, periodicals, microfilm, and other educational materials, including telecommunications program materials;
(6) Tutoring, counseling, and student service programs designed to improve academic success;
(7) Funds and administrative management, and acquisition of equipment for use in strengthening funds management;
(8) Joint use of facilities, such as laboratories and libraries;
(9) Establishing or improving a development office to strengthen or improve contributions from alumni and the private sector;
(10) Establishing or enhancing a program of teacher education designed to qualify students to teach in a public elementary or secondary school in the State that shall include, as part of such program preparation for teacher certification;
(11) Establishing community outreach programs that will encourage elementary and secondary students to develop the academic skills and the interest to pursue postsecondary education;
(12) Other activities that it proposes in its application that contribute to carrying out the purpose of this part and are approved by the Secretary;
(13) Establishing or improving a development office to strengthen and increase contributions from alumni and the private sector; and
(14) Establishing and maintaining an institutional endowment under 34 CFR part 628 to facilitate financial independence.
(b)
(1) Activities that are not included in the grantee's approved application;
(2) Activities described in paragraph (a)(12) of this section that are not approved by the Secretary;
(3) Activities that are inconsistent with any State plan of higher education that is applicable to the institution;
(4) Activities that are inconsistent with a State plan for desegregation of higher education that is applicable to the institution;
(5) Activities or services that relate to sectarian instruction or religious worship; and
(6) Activities provided by a school or department of divinity. For the purpose of this section, a “school or department of divinity” means an institution, or a department of an institution, whose program is specifically for the education of students to prepare them to become ministers of religion or to enter upon some other religious vocation, or to prepare them to teach theological subjects.
(c) No award under this part may be used for telecommunications technology equipment, facilities or services, if such equipment, facilities or services are available pursuant to section 396(k) of the Communications Act of 1934.
The Secretary may award a grant under this part for a period of up to five academic years.
In order to receive a grant under this part, an institution must submit an application to the Secretary at such time and in such manner as the Secretary may prescribe. The application must contain—
(a) A description of the activities to be carried out with grant funds and how those activities will improve graduate educational opportunities for Black and low-income students and lead to greater financial independence for the applicant;
(b) A description of how the applicant is making a substantial contribution to the legal, medical, dental, veterinary or other graduate education opportunities for Black Americans;
(c) An assurance from each applicant requesting in excess of $500,000 that 50 percent of the costs of all the activities to be carried out under the grant will come from non-Federal sources;
(d) A description of how the grant funds will be used so that they will supplement, and to the extent practical, increase the funds that would
(e) An assurance that the proposed activities in the application are in accordance with any State plan that is applicable to the institution; and
(f)(1) A comprehensive development plan as described in § 609.21; or
(2) If an applicant has already submitted a comprehensive development plan as described in § 609.21, a description of the progress the applicant has made in carrying out the goals of its plan.
(a) A comprehensive development plan must describe an institution's strategy for achieving growth and self-sufficiency by strengthening its—
(1) Financial management;
(2) Academic programs; and
(b) The comprehensive development plan must include the following:
(1) An assessment of the strengths and weaknesses of the institution's financial management and academic programs.
(2) A delineation of the institution's goals for its financial management and academic programs, based on the outcomes of the assessment described in paragraph (b)(1) of this section.
(3) A listing of measurable objectives designed to assist the institution to reach each goal with accompanying timeframes for achieving the objectives.
(4) A description of methods, processes and procedures that will be used by the college or university to institutionalize financial management and academic program practices and improvements developed under the proposed funded activities.
The Secretary approves any application that satisfies the requirements of §§ 609.10 and 609.20.
Of the amount appropriated for any fiscal year—
(a)(1) The first $12,000,000 (or any lesser amount appropriated) shall be available only for the purpose of making grants to institutions or programs described in § 609.2(b)(1) through § 609.2(b)(5);
(2) If the sum of the approved applications does not exceed the amount appropriated, the Secretary awards grants in the amounts requested and approved;
(3) If the sum of the approved requests exceeds the sum appropriated, and Morehouse School of Medicine submits an approved request for at least $3,000,000, and the amount appropriated exceeds $3,000,000, the Secretary awards no less than $3,000,000 to Morehouse School of Medicine and reduces the grants to the institutions described in § 609.2(b)(1) through § 609.2(b)(5) as the Secretary considers appropriate, so that the sum of the approved grants equals the amount appropriated; and
(4) If Morehouse School of Medicine submits an approved request for at least $3,000,000 and the amount appropriated does not exceed $3,000,000, Morehouse School of Medicine receives all the appropriated funds; and
(b)(1) Any amount appropriated in excess of $12,000,000 shall be available for the purpose of making grants, in equal amounts not to exceed $500,000, to institutions or programs described in § 609.2(b)(6) through § 609.2(b)(16); and
(2) If any funds remain, the Secretary makes grants to institutions or programs described in § 609.2(b)(1) through § 609.2(b)(16).
If an institution receives a grant in excess of $500,000, it must spend non-Federal funds to meet the cost of at least 50 percent of the activities approved in its application.
(a)
(b)
(c)
(1) Spend more than fifty percent of its grant award in each fiscal year for costs relating to constructing or maintaining a classroom, library, laboratory, or other instructional facility; and
(2) Use an indirect cost rate to determine allowable costs under its grant.
(a)(1) A grantee shall provide for the conduct of a compliance and financial audit of any funds it receives under this part by a qualified, independent organization or person in accordance with the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, 1981 revision, established by the Comptroller General of the United States. This publication is available from the Superintendent of Documents, U.S. Government Printing Office.
(2) The grantee shall have an audit conducted at least once every two years, covering the period since the previous audit, and the grantee shall submit the audit to the Secretary.
(3) If a grantee is audited under chapter 75 of title 31 of the United States Code, the Secretary considers that audit to satisfy the requirements of paragraph (a)(1) of this section.
(b) An institution awarded a grant under this part must submit to the Department of Education Inspector General three copies of the audit required in paragraph (a) of this section within six months after completion of the audit.
(c) Any individual or firm conducting an audit described in this section shall give the Department of Education's Inspector General access to records or other documents necessary to review the results of the audit.
(d) A grantee shall repay to the Treasury of the United States any grant funds it received that it did not expend or use to carry out the allowable activities included in its approved application within ten years following the date of the initial grant it received under this part.
The Secretary terminates any grant under which funds were not expended if an institution loses—
(a) Its accredited status; or
(b) Its legal authority in the State in which it is located.
20 U.S.C. 1021
The following definitions apply to this part:
(1) An LEA with at least one school—
(i) In which 50 percent or more of the enrolled students are eligible for free and reduced lunch subsidies; or
(ii) That otherwise is eligible, without receipt of a waiver, to operate as a schoolwide program under Title I of the Elementary and Secondary Education Act.
(2) An LEA that has one school where—
(i) More than 34 percent of academic classroom teachers overall (across all academic subjects) do not have a major, minor, or significant course work in their main assignment field; or
(ii) More than 34 percent of the main assignment faculty in two of the core-subject departments do not have a major, minor, or significant work in their main assigned field.
(3) An LEA that serves a school whose attrition rate among classroom teachers was 15 percent or more over the last three school years.
(a) In addition to a description of the proposed multiyear project, timeline, and budget information required by 34 CFR 75.112 and 75.117 and other applicable law, an applicant for a grant under this part must submit with its application under paragraphs (a)(1), (a)(2)(iii), or (a)(3)(iii) of § 611.3, as appropriate, a management plan that includes a proposed multiyear workplan.
(b) At a minimum, this workplan must identify, for each year of the project—
(1) The project's overall objectives;
(2) Activities that the applicant proposes to implement to promote each project objective;
(3) Benchmarks and timelines for conducting project activities and achieving the project's objectives;
(4) The individual who will conduct and coordinate these activities;
(5) Measurable outcomes that are tied to each project objective, and the evidence by which success in achieving these objectives will be measured; and
(6) Any other information that the Secretary may require.
(c)(1) In any application for a grant that is submitted on behalf of a partnership, the workplan also must identify which partner will be responsible for which activities.
(2) In any application for a grant that is submitted on behalf of a State, the workplan must identify which entities in the State will be responsible for which activities.
The Secretary uses the selection procedures in 34 CFR 75.200 through 75.222 except that—
(a)
(2) For the Partnership Grants Program, the Secretary—
(i) Uses a two-stage application process to determine which applications to fund;
(ii) Uses the selection criteria in §§ 611.21 through 611.22 to evaluate pre-applications submitted for new grants, and to determine those applicants to invite to submit full program applications; and
(iii) For those applicants invited to submit full applications, uses the selection criteria and competitive preference in §§ 611.23-611.25 to evaluate the full program applications.
(3) For the Teacher Recruitment Grants Program, the Secretary—
(i) Uses a two-stage application process to determine which applications to fund;
(ii) Uses the selection criteria in § 611.31 to evaluate pre-applications submitted for new grants, and to determine those applicants to invite to submit full program applications; and
(iii) For those applicants invited to submit full applications, uses the selection criteria in § 611.32 to evaluate the full program applications.
(b)
(c)
In evaluating the quality of applications, the Secretary uses the following selection criteria.
(a)
(2) In determining the quality of the project design, the Secretary considers the extent to which—
(i) The project design will result in systemic change in the way that all new teachers are prepared, and includes partners from all levels of the education system;
(ii) The Governor and other relevant executive and legislative branch officials, the K-16 education system or systems, and the business community are directly involved in and committed to supporting the proposed activities;
(iii) Project goals and performance objectives are clear, measurable outcomes are specified, and a feasible plan is presented for meeting them;
(iv) The project is likely to initiate or enhance and supplement systemic State reforms in one or more of the following areas: teacher recruitment, preparation, licensing, and certification;
(v) The applicant will ensure that a diversity of perspectives is incorporated into operation of the project, including those of parents, teachers, employers, academic and professional groups, and other appropriate entities; and
(vi) The project design is based on up-to-date knowledge from research and effective practice.
(b)
(2) In determining the significance of the project, the Secretary considers the extent to which—
(i) The project involves the development or demonstration of promising new strategies or exceptional approaches in the way new teachers are recruited, prepared, certified, and licensed;
(ii) Project outcomes lead directly to improvements in teaching quality and student achievement as measured against rigorous academic standards;
(iii) The State is committed to institutionalize the project after federal funding ends; and
(iv) Project strategies, methods, and accomplishments are replicable, thereby permitting other States to benefit from them.
(c)
(2) In determining the quality of the project resources, the Secretary considers the extent to which—
(i) Support available to the project, including personnel, equipment, supplies, and other resources, is sufficient to ensure a successful project;
(ii) Budgeted costs are reasonable and justified in relation to the design, outcomes, and potential significance of the project; and
(iii) The applicant's matching share of the budgeted costs demonstrates a significant commitment to successful completion of the project and to project continuation after federal funding ends.
(d)
(2) In determining the quality of the management plan, the Secretary considers the following factors:
(i) The extent to which the management plan, including the workplan, is designed to achieve goals and objectives of the project, and includes clearly defined activities, responsibilities, timelines, milestones, and measurable outcomes for accomplishing project tasks.
(ii) The adequacy of procedures to ensure feedback and continuous improvements in the operation of the project.
(iii) The qualifications, including training and experience, of key personnel charged with implementing the project successfully.
In reviewing applications that propose to undertake teacher recruitment activities, the Secretary also considers the following selection criteria:
(a) In addition to the elements contained in § 611.11(a) (Quality of project design), the Secretary considers the extent to which the project addresses—
(1) Systemic changes in the ways that new teachers are to be recruited, supported and prepared; and
(2) Systemic efforts to recruit, support, and prepare prospective teachers from disadvantaged and other underrepresented backgrounds.
(b) In addition to the elements contained in § 611.11(b) (Significance), the Secretary considers the applicant's commitment to continue recruitment activities, scholarship assistance, and preparation and support of additional cohorts of new teachers after funding under this part ends.
(c) In addition to the elements contained in § 611.11(c) (Quality of resources), the Secretary considers the impact of the project on high-need LEAs and high-need schools based upon—
(1) The amount of scholarship assistance the project will provide students from federal and non-federal funds;
(2) The number of students who will receive scholarships; and
(3) How those students receiving scholarships will benefit from high-quality teacher preparation and an effective support system during their first three years of teaching.
The Secretary provides a competitive preference on the basis of how well the State’s proposed activities in any one or more of the following statutory priorities are likely to yield successful and sustained results:
(a) Initiatives to reform State teacher licensure and certification requirements so that current and future teachers possess strong teaching skills and academic content knowledge in the subject areas in which they will be certified or licensed to teach.
(b) Innovative reforms to hold higher education institutions with teacher preparation programs accountable for preparing teachers who are highly competent in the academic content areas and have strong teaching skills.
(c) Innovative efforts to reduce the shortage (including the high turnover) of highly competent teachers in high-poverty urban and rural areas.
In evaluating the quality of pre-applications, the Secretary uses the following selection criteria.
(a)
(2) In determining the quality of the project goals and objectives, the Secretary considers the following factors:
(i) The extent to which the partnership's vision will produce significant and sustainable improvements in teacher education.
(ii) The needs the partnership will address.
(iii) How the partnership and its activities would be sustained once federal support ends.
(b)
(2) In determining the quality of the partnering commitment, the Secretary considers the following factors:
(i) Evidence of how well the partnership would be able to accomplish objectives working together that its individual members could not accomplish working separately.
(ii) The significance of the roles given to each principal partner in implementing project activities.
(c)
(2) In determining the quality and comprehensiveness of key project components in the process of preparing new teachers, the Secretary considers the extent to which—
(i) Specific activities are designed and would be implemented to ensure that students preparing to be teachers are adequately prepared, including activities designed to ensure that they have improved content knowledge, are able to use technology effectively to promote instruction, and participate in extensive, supervised clinical experiences;
(ii) Specific activities are designed and would be implemented to ensure adequate support for those who have completed the teacher preparation program during their first years as teachers; and
(iii) The project design reflects up-to-date knowledge from research and effective practice.
(d)
(2) In determining the specific outcomes the project would produce in the preparation of new teachers, the Secretary considers the following factors:
(i) The extent to which important aspects of the partnership's existing teacher preparation system would change.
(ii) The way in which the project would demonstrate success using high-quality performance measures.
In reviewing pre-applications that propose to undertake teacher recruitment activities, the Secretary also considers the following selection criteria:
(a) In addition to the elements contained in § 611.21(a) (Project goals and objectives), the Secretary considers the extent to which—
(1) The partnership's vision responds to LEA needs for a diverse and high quality teaching force, and will lead to reduced teacher shortages in these high-need LEAs; and
(2) The partnership will sustain its work after federal funding has ended by recruiting, providing scholarship assistance, training and supporting additional cohorts of new teachers.
(b) In addition to the elements contained in § 611.21(c) (Quality and comprehensiveness of key project components), the Secretary considers the extent to which the project will—
(1) Significantly improve recruitment of new students, including those from disadvantaged and other underrepresented backgrounds; and
(2) Provide scholarship assistance and adequate training to preservice students, as well as induction support for those who become teachers after graduating from the teacher preparation program.
(c) In addition to the elements contained in § 611.21(d) (Specific project outcomes), the Secretary considers the extent to which the project addresses the number of new teachers to be produced and their ability to teach effectively in high-need schools.
In evaluating the quality of applications, the Secretary uses the following selection criteria.
(a)
(2) In determining the quality of the project design, the Secretary considers the following factors:
(i) The extent of evidence of institution-wide commitment to high quality teacher preparation that includes significant policy and practice changes supported by key leaders, and which result in permanent changes to ensure that preparing teachers is a central mission of the entire university.
(ii) The extent to which the partnership creates and sustains collaborative mechanisms to integrate professional teaching skills, including skills in the use of technology in the classroom, with strong academic content from the arts and sciences.
(iii) The extent of well-designed and extensive preservice clinical experiences for students, including mentoring and other forms of support, implemented through collaboration between the K-12 and higher education partners.
(iv) Whether a well-planned, systematic induction program is established for new teachers to increase their chances of being successful in high-need schools.
(v) The strength of linkages within the partnership between higher education and high-need schools or school districts so that all partners have important roles in project design, implementation, governance and evaluation.
(vi) Whether the project design is based on up-to-date knowledge from research and effective practice, especially on how students learn.
(b)
(2) In determining the significance of the project activities, the Secretary considers the following factors:
(i) How well the project involves promising new strategies or exceptional approaches in the way new teachers are recruited, prepared and inducted into the teaching profession.
(ii) The extent to which project outcomes include preparing teachers to teach to their State's highest K-12 standards, and are likely to result in improved K-12 student achievement.
(iii) The extent to which the partnership has specific plans to institutionalize the project after federal funding ends.
(iv) The extent to which the partnership is committed to disseminating effective practices to others and is willing to provide technical assistance about ways to improve teacher education.
(v) How well the partnership will integrate its activities with other education reform efforts underway in the State or communities where the partners are located, and will coordinate its work with local, State or federal teacher training, teacher recruitment, or professional development programs.
(c)
(2) In determining the quality of resources, the Secretary considers the extent to which—
(i) Support available to the project, including personnel, equipment, supplies, and other resources, is sufficient to ensure a successful project;
(ii) Budgeted costs are reasonable and justified in relation to the design, outcomes, and potential significance of the project; and
(iii) The applicant's matching share of the budgeted costs demonstrates a significant commitment to successful completion of the project and to project continuation after federal funding ends.
(d)
(2) In determining the quality of the management plan, the Secretary considers the following factors:
(i) The extent to which the management plan, including the work plan, is designed to achieve goals and objectives of the project, and includes clearly defined activities, responsibilities, timelines, milestones, and measurable outcomes for accomplishing project tasks.
(ii) The extent to which the project has an effective, inclusive, and responsive governance and decision-making structure that will permit all partners to participate in and benefit from project activities, and to use evaluation results to ensure continuous improvements in the operations of the project.
(iii) The qualifications, including training and experience, of key personnel charged with implementing the project successfully.
In reviewing full applications that propose to undertake teacher recruitment activities, the Secretary also considers the following selection criteria:
(a) In addition to the elements contained in § 611.23(a) (Quality of project design), the Secretary considers the extent to which the project reflects—
(1) A commitment to recruit, support and prepare additional well-qualified new teachers for high-need schools;
(2) Appropriate academic and student support services; and
(3) A comprehensive strategy for addressing shortages of well-qualified and well-trained teachers in high-need LEAs, especially teachers from disadvantaged and other underrepresented backgrounds.
(b) In addition to the elements contained in § 611.23(b) (Significance of project activities), the Secretary considers the extent to which the project promotes the recruitment, scholarship assistance, preparation, and support of additional cohorts of new teachers.
(c) In addition to the elements contained in § 611.23(c) (Quality of resources), the Secretary considers the impact of the project on high-need LEAs and high-need schools based upon—
(1) The amount of scholarship assistance the project will provide students from federal and non-federal funds;
(2) The number of students who will receive scholarships; and
(3) How those students receiving scholarships will benefit from high-quality teacher preparation and an effective support system during their first three years of teaching.
The Secretary provides a competitive preference on the basis of how well the project includes a significant role for private business in the design and implementation of the project.
In evaluating pre-applications, the Secretary considers the following criteria:
(a)
(2) In determining the quality of the project goals and objectives, the Secretary considers how the partnership or State applicant intends to—
(i) Produce significant and sustainable improvements in teacher recruitment, preparation, and support; and
(ii) Reduce teacher shortages in high-need LEAs and schools, and improve student achievement in the schools in which teachers who participate in its project will teach.
(b)
(2) In determining the quality of the partnering commitment, the Secretary considers the following factors:
(i) What the partnership, or the State and its cooperating entities, can accomplish by working together that could not be achieved by working separately.
(ii) How the project proposed by the partnership or State is driven by the needs of LEA partners.
(c)
(2) In determining the quality of key project components, the Secretary considers the following factors:
(i) The extent to which the project would make significant and lasting systemic changes in how the applicant recruits, trains, and supports new teachers, and reflects knowledge gained from research and practice.
(ii) The extent to which the project would be implemented in ways that significantly improve recruitment, scholarship assistance to preservice students, training, and induction support for new entrants into teaching.
(d)
(2) In determining the specific outcomes the project would produce in the recruitment, preparation, and placement of new teachers, the Secretary considers the following factors:
(i) The number of teachers to be produced and the quality of their preparation.
(ii) The partnership's or State's commitment to sustaining the work of the project after federal funding has ended by recruiting, providing scholarship assistance, training, and supporting additional cohorts of new teachers.
In evaluating the quality of full applications, the Secretary uses the following selection criteria.
(a)
(2) In considering the quality of the project design for ensuring that activities to recruit and prepare new teachers are a central mission of the project, the Secretary considers the extent to which the project design—
(i) Shows evidence of institutional or (in the case of a State applicant) State-level commitment both to recruitment of additional new teachers, and to high-quality teacher preparation that includes significant policy and practice changes supported by key leaders and that result in permanent changes to current institutional practices;
(ii) Creates and sustains collaborative mechanisms to integrate professional teaching skills, including skills in the use of technology in the classroom, with academic content provided by the school of arts and sciences;
(iii) Includes well-designed academic and student support services as well as carefully planned and extensive preservice clinical experiences for students, including mentoring and other forms of support, that are implemented through collaboration between the K-12 and higher education partners;
(iv) Includes establishment of a well-planned, systematic induction program for new teachers that increases their chances of being successful in high-need schools;
(v) Includes strong linkages among the partner institutions of higher education and high-need schools and school districts (or, in the case of a State applicant, between the State and these entities in its project), so that all those who would implement the project have important roles in project design, implementation, governance, and evaluation;
(vi) Responds to the shortages of well-qualified and well-trained teachers in high-need school districts, especially from disadvantaged and other underrepresented backgrounds; and
(vii) Is based on up-to-date knowledge from research and effective practice.
(b)
(2) In determining the significance of the project, the Secretary considers the extent to which—
(i) The project involves promising new strategies or exceptional approaches in the way new teachers are recruited, prepared, and inducted into the teaching profession;
(ii) Project outcomes include measurable improvements in teacher quality and in the number of well-prepared new teachers, that are likely to result in improved K-12 student achievement;
(iii) The project will be institutionalized after federal funding ends, including recruitment, scholarship assistance, preparation, and support of additional cohorts of new teachers;
(iv) The project will disseminate effective practices to others, and provide technical assistance about ways to improve teacher recruitment and preparation; and
(v) The project will integrate its activities with other education reform activities underway in the State or communities in which the project is based, and will coordinate its work with local, State, and federal teacher recruitment, training, and professional development programs.
(c)
(2) In determining the quality of the project's resources, the Secretary considers the extent to which—
(i) The amount of support available to the project, including personnel, equipment, supplies, student scholarship assistance, and other resources is sufficient to ensure a successful project.
(ii) Budgeted costs are reasonable and justified in relation to the design, outcomes, and potential significance of the project.
(iii) The applicant's matching share of budgeted costs demonstrates a significant commitment to successful completion of the project, and to project continuation after federal funding ends.
(d)
(2) In determining the quality of the management plan, the Secretary considers the following factors:
(i) The extent to which the management plan, including the workplan, is designed to achieve goals and objectives of the project, and includes clearly defined activities, responsibilities, timelines, milestones, and measurable outcomes for accomplishing project tasks.
(ii) The extent to which the project has an effective, inclusive, and responsive governance and decisionmaking structure that will permit all partners to participate in and benefit from project activities, and to use evaluation results to continuously improve project operations.
(iii) The qualifications, including training and experience, of key personnel charged with implementing the project successfully.
(a)
(1) Teach in a high-need school of a high-need LEA for a period of time equivalent to the period for which the individual receives the scholarship; or
(2) Repay, as set forth in § 611.43, the Teacher Quality Enhancement Grant Program funds provided as a scholarship.
(b)
(a)
(2) The period for which the recipient received scholarship assistance is the
(b)
(2) The Secretary calculates the period that a scholarship recipient must teach in a high-need school of a high-need LEA in order to fulfill his or her service obligation by—
(i) Comparing the period in which the recipient received a scholarship as provided in paragraph (a) of this section with the information provided by the high-need LEA under §§ 611.46 and 611.47 on the period the recipient has taught in one of its high-need schools; and
(ii) Adjusting the period in which the recipient has taught in a high-need school to reflect the individual's employment, if any, as a teacher on a part-time basis relative to classroom teachers the LEA employs on a full-time basis under the LEA's standard yearly contract (excluding any summer or intersession period).
(c) The Secretary adjusts the period of a scholarship recipient's service obligation as provided in paragraph (b) of this section to reflect information the high-need LEA provides under §§ 611.46 and 611.47 that the scholarship recipient also has taught in a high-need school in a summer or intersession period.
(a)
(i) Repay the Department the full amount of the scholarship, including the principal balance, accrued interest, and any collection costs charged under paragraphs (c) and (d) of this section; or
(ii) Be discharged of any repayment obligation as provided in § 611.45.
(2) Unless the service obligation is deferred as provided in § 611.44 or the repayment requirement is discharged, the obligation to repay the amount provided in paragraph (a)(1) of this section begins six months after the date the recipient—
(i) Completes the teacher training program without beginning to teach in a high-need school of a high-need LEA; or
(ii) Is no longer enrolled in the teacher training program.
(3) The Secretary determines whether a scholarship recipient has fulfilled the service obligation on the basis of information that the Department receives as provided in §§ 611.46 and 611.47.
(b)
(i) The amount of the scholarship that is proportional to the unmet portion of the service obligation;
(ii) Interest that accrues on this portion of the scholarship beginning six months after the recipient's graduation from the teacher preparation program; and
(iii) Costs of collection, if any.
(2) Unless the service obligation is deferred or the repayment requirement is discharged, the obligation to repay the amount provided in paragraph (b)(1) of this section begins six months after the date the recipient is no longer employed as a teacher in a high-need school of a high-need LEA.
(c)
(2) A payment schedule must permit the full amount of the scholarship and accrued interest to be repaid within ten years. The minimum monthly payment is $50 unless a larger monthly payment is needed to enable the full amount that is due to be paid within this timeframe.
(d)
(e)
(1) In non-compliance with the terms of the scholarship;
(2) Liable for repayment of the scholarship and accrued interest; and
(3) Subject to collection action.
(f)
(a) Upon written request, the Secretary may defer a service obligation for a scholarship recipient who—
(1) Has not begun teaching in a high-need school of a high-need LEA as required by § 611.41(a); or
(2) Has begun teaching in a high-need school of a high-need LEA, and who requests the deferment within six months of the date he or she no longer teaches in this school.
(b) To obtain a deferment of the service obligation, the recipient must provide the Secretary satisfactory information of one or more of the following circumstances:
(1) Serious physical or mental disability that prevents or substantially impairs the scholarship recipient's employability as a teacher.
(2) The scholarship recipient's inability, despite due diligence (for reasons that may include the failure to pass a required teacher certification or licensure examination), to secure employment as a teacher in a high-need school of a high-need school LEA.
(3) Membership in the armed forces of the United States on active duty for a period not to exceed three years.
(4) Other extraordinary circumstances that the Secretary accepts.
(c) Unless the Secretary determines otherwise—
(1) A scholarship recipient must apply to renew a deferment of the service obligation on a yearly basis; and
(2) The recipient has 60 days from the end of the deferment period to begin teaching in a high-need school of a high-need LEA or become liable for repayment of the scholarship, any accrued interest, and any costs of collection.
(d)(1) As provided in § 611.43(a)(2), during periods for which the Secretary defers a scholarship recipient's service obligation, the scholarship recipient does not have an obligation to repay the scholarship. However, interest continues to accrue on the amount of the scholarship.
(2) If the scholarship recipient fulfills his or her service obligation after the end of the deferment, the Secretary waives the obligation to repay accrued interest.
(a) The Secretary discharges the obligation of a scholarship recipient to repay the scholarship, interest, and any costs for failure to meet the service obligation based on information acceptable to the Secretary of—
(1) The recipient's death; or
(2) The total and permanent physical or mental disability of the recipient
(b) Upon receipt of acceptable documentation and approval of the discharge request, the Secretary returns to the scholarship recipient, or for a discharge based on death to the recipient's estate, those payments received after the date the eligibility requirements for discharge were met. The Secretary returns these payments whether they are received before or after the date the discharge was approved.
(a) Within six months of graduating from a teacher preparation program, a scholarship recipient must either—
(1) Have the LEA in which the recipient is employed as a teacher provide the Department information, which the Secretary may require, to confirm—
(i) The home address, phone number, social security number, and other identifying information about the recipient;
(ii) That he or she is teaching in a high-need school of a high-need LEA; and
(iii) Whether the individual is teaching full- or part-time and, if part-time, the full-time equivalency of this teaching compared to the LEA's full-time teachers;
(2) Provide the Department—
(i) A notarized statement that the scholarship recipient has asked the LEA to provide the Department the information identified in paragraph (a)(1) of this section, including the name and telephone number of the LEA official to whom the request was made; and
(ii) A copy of the information identified in paragraph (a)(1) of this section that the recipient has asked the LEA to provide to the Department; or
(3) Provide the Department a current home address and telephone number, a work address and telephone number, the recipient's social security number, and one of the following:
(i) The required repayment of the scholarship.
(ii) A request that the Secretary permit the recipient to repay the scholarship and accrued interest in installments as permitted by § 611.43(c).
(iii) A request that the Secretary defer the service obligation as permitted by § 611.44.
(b) If the recipient provides the Department the information identified in paragraph (a)(1) of this section, the Department accepts the information provisionally, but the recipient retains responsibility for working to have the LEA submit the information.
(a) At the close of the LEA's academic year, a scholarship recipient whose LEA reports under § 611.46(a) that he or she is teaching in a high-need school of a high-need LEA must—
(1) Have the LEA provide information to the Department, as the Secretary may require, that confirms the recipient's actual employment status for the preceding period; or
(2) Provide the Department—
(i) A notarized statement that the scholarship recipient has asked the LEA to provide the Department the information identified in paragraph (a)(1) of this section, including the name and telephone number of the LEA official to whom the request was made; and
(ii) A copy of the information identified in paragraph (a)(1) of this section that the recipient has asked the LEA to provide to the Department.
(b) If the recipient provides the Department the notarized statement and accompanying information identified in paragraph (a)(2) of this section, the Department accepts the information provisionally, but the recipient retains an ongoing responsibility for working to have the LEA submit the information directly to the Department.
(c) In subsequent school years, the recipient must have the LEA continue to provide information to the Department on the recipient's employment as the Secretary may require, until the Department notifies the recipient that
(d)(1) The Secretary provides a scholarship recipient with credit toward the service obligation for teaching in a high-need school of a high-need LEA during a summer or intersession period (for LEAs that operate year-round programs).
(2) To receive this credit, the recipient must have the LEA at the end of the summer or intersession period provide information to the Department, as the Secretary may require, that confirms that the recipient has taught during this period in a high-need school.
(a)(1) Within six months of the date the scholarship recipient is no longer enrolled in the teacher training program, or within six months of the IHE's withdrawal of scholarship support for failure to maintain good academic standing, the recipient must submit to the Department—
(i) The required repayment of the scholarship;
(ii) A request that the Secretary establish a binding schedule under which the recipient is obligated to repay the scholarship, accrued interest, and any costs of collection; or
(iii) A request that the Secretary defer the service obligation as permitted by § 611.44.
(2) Upon review of the repayment or information provided under paragraph (a)(1) of this section, the Department notifies the recipient of the status of the recipient's obligations and of any schedule under which the recipient must repay the scholarship.
(b) Until the Secretary determines that the individual either has satisfied his or her service obligation or has repaid the full amount of the scholarship, accrued interest, and any costs, the recipient also remains responsible for providing the Department—
(1) The information identified in this part; and
(2) A current home address and telephone number, and a current work address and work telephone number.
Before awarding scholarship assistance with funds provided under this part to any student attending a teacher preparation program, a grantee must—
(a) Ensure that the student understands the terms and conditions that the Secretary has determined must be included in the scholarship agreement;
(b) Have the student and the institution awarding the scholarship execute a scholarship agreement that contains these terms and conditions; and
(c) Establish policies for—
(1) The withdrawal of scholarship support for any student who does not remain in good academic standing; and
(2) Determining when and if re-negotiation of a student's scholarship package over an extended period of time is appropriate.
(a) Within 30 days of the beginning of the teacher preparation program's academic term or within 30 days of the execution of any scholarship agreement, whichever is later, the grantee must provide to the Department the following information:
(1) The identity of each scholarship recipient.
(2) The amount of the scholarship provided with program funds to each recipient.
(3) The full-time equivalency, over each academic year, of each recipient's enrollment in the teacher training program for which he or she receives scholarship assistance.
(4) Other information as the Secretary may require.
(b) Within 30 days of a scholarship recipient's graduation or withdrawal from the teacher preparation program, the grantee must provide to the Department the following information:
(1) The date of the recipient's graduation or withdrawal.
(2) The total amount of program funds the grantee awarded as a scholarship to the recipient.
(3) The original of any scholarship agreement executed by the scholarship recipient and the grantee (or its partnering IHE if the grantee is not an IHE) before the recipient was awarded a scholarship with program funds.
(4) A statement of whether the institution has withdrawn scholarship support because of the recipient's failure to maintain good academic standing.
(5) Other information as the Secretary may require.
(a) An institution that provides a scholarship with funds provided under this part must conduct an exit conference with each scholarship recipient before that individual leaves the institution. During the exit conference the institution must give the recipient a copy of any scholarship agreement the recipient has executed.
(b) The institution also must review with the recipient the terms and conditions of the scholarship, including—
(1) The recipient's service obligation;
(2) How the recipient can confirm whether a school and LEA in which he or she would teach will satisfy the service obligation;
(3) Information that the recipient will need to have the LEA provide to the Department to enable the Secretary to confirm that the recipient is meeting the service obligation;
(4) How the recipient may request a deferment of the service obligation, and information that the recipient should provide the Department in any deferment request;
(5) The consequences of failing to meet the service obligation including, at a minimum, the amount of the recipient's potential indebtedness; the possible referral of the indebtedness to a collection firm, reporting it to a credit bureau, and litigation; and the availability of a monthly payment schedule;
(6) The amount of scholarship assistance and interest charges that the recipient must repay for failing to meet the service obligation; and
(7) The recipient's responsibility to ensure that the Department has a home address and telephone number, and a work address and telephone number until the Secretary has determined that the recipient has fulfilled the service obligation or the recipient's debt has been paid or discharged; and
(8) The follow-up services that the institution will provide the student during his or her first three years of teaching in a high-need school of a high-need LEA.
In implementing its approved project, the grantee must—
(a) Provide scholarship recipients both before and after graduation with appropriate support services, including academic assistance, job counseling, placement assistance, and teaching support that will help to ensure that—
(1) Upon graduation, scholarship recipients are able to secure teaching positions in high-need schools of high-need LEAs; and
(2) After beginning to teach in a high-need school of a high-need LEA, former scholarship recipients have appropriate follow-up services and assistance during their first three years of teaching;
(b) Provide LEAs with which the grantees collaborate in teacher recruitment activities with information and other assistance they need to recruit highly-qualified teachers effectively; and
(c) Work with the high-need LEAs participating in its project to ensure that scholarship recipients are placed, to the extent possible, in highest-need schools of those LEAs.
Notwithstanding 34 CFR 75.560-75.562 and 34 CFR 80.22, the maximum indirect cost rate that any recipient of funds under the Teacher Quality Enhancement Grants Program may use to charge indirect costs to these funds is the lesser of—
(a) The rate established by the negotiated indirect cost agreement; or
(b) Eight percent.
(a)(1) Each State receiving a grant under the State Grants Program or Teacher Recruitment Grants Program must provide, from non-federal sources, an amount equal to 50 percent of the amount of the grant to carry out the activities supported by the grant.
(2) The 50 percent match required by paragraph (a)(1) of this section must be made annually during the project period, with respect to each grant award the State receives.
(b) Each partnership receiving a grant under the Partnership Grant Program or the Teacher Recruitment Grant Program must provide, from non-federal sources, an amount equal to—
(1) 25 percent of the grant award for the first year of the grant;
(2) 35 percent of the grant award for the second year of the grant; and
(3) 50 percent of the grant award for each succeeding year of the grant.
(c) The match from non-federal sources required by paragraphs (a) and (b) of this section may be made in cash or in kind.
20 U.S.C. 6832, unless otherwise noted.
(a) This program provides grants to help future teachers become proficient in the use of modern learning technologies and to support training for pre-service teachers.
(b) A grantee may not use funds under this program for in-service training or continuing education for currently certified teachers.
(a) Except as provided in paragraph (b) of this section, an eligible applicant is a consortium that includes at least two or more of the following: institutions of higher education, schools of education, community colleges, State educational agencies, local educational agencies, private elementary or secondary schools, professional associations, foundations, museums, libraries, private sector businesses, public or private nonprofit organizations, community based organizations, or any other entities able to contribute to teacher preparation program reforms that produce technology-proficient teachers.
(b) At least one member of the consortium must be a nonprofit entity.
The following regulations apply to Preparing Tomorrow's Teachers to Use Technology:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs), except for § 75.102.
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 80 (Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments).
(6) 34 CFR part 81 (General Education Provisions Act—Enforcement).
(7) 34 CFR part 82 (New Restrictions on Lobbying).
(8) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(9) 34 CFR part 86 (Drug-Free Schools and Campuses).
(10) 34 CFR part 97 (Protection of Human Subjects).
(11) 34 CFR part 98 (Student Rights in Research, Experimental Programs and Testing).
(12) 34 CFR part 99 (Family Educational Rights and Privacy).
(b) The regulations in this part 614.
(a) For purposes of 34 CFR 75.127, the lead applicant for the consortium must be a nonprofit member of the consortium.
(b) The lead applicant must serve as the fiscal agent.
A consortium must provide at least 50 percent of the total project cost per budget period of the project using non-Federal funds.
(a) The maximum indirect cost rate for all consortium partners and any cost-type contract made under these grants is eight percent of a modified total direct cost base or the partner's negotiated indirect cost rate, whichever rate is lower.
(b) For purposes of this section, a modified total direct cost base is total direct costs less stipends, tuition, and related fees, and capital expenditures of $5,000 or more.
(c) Indirect costs in excess of the maximum may not be—
(1) Charged as direct costs by the grantee;
(2) Used by the grantee to satisfy matching or cost sharing requirements; or
(3) Charged by the grantee to another Federal award.
Grant funds may not be used—
(a) To recruit prospective teachers;
(b) To support the cost of a prospective teacher's education through any form of financial aid assistance including scholarships, internships, or student stipends; or
(c) For in-service training or continuing education for currently certified teachers.
Notwithstanding § 75.102 of this chapter, an application for a grant under this program must be received by the deadline date that will be announced in
20 U.S.C. 1065, unless otherwise noted.
The Endowment Challenge Grant Program provides endowment challenge grants, which must be matched, to eligible institutions to—
(a) Establish or increase endowment challenge funds;
(b) Provide additional incentives to promote fund-raising activities; and
(c) Foster increased independence and self-sufficiency at those institutions.
An institution is eligible to apply for an endowment challenge grant if—
(a) It qualifies as an eligible institution for the Strengthening Institutions Program under 34 CFR 607.2;
(b) It qualifies as an eligible institution for the Strengthening Historically Black Colleges and Universities Program under 34 CFR 608.2;
(c) It would have qualified as an eligible institution for the Strengthening Institutions Program if 34 CFR 607.2(a)(3) referred to a postgraduate degree rather than a bachelor's degree;
(d) It would have qualified as an eligible institution for the Strengthening Historically Black Colleges and Universities Program if 34 CFR 608.2(a)(4)(i) referred to a postgraduate degree rather than a bachelor's degree; or
(e) It qualifies as an institution that makes a substantial contribution to graduate or postgraduate medical educational opportunities for minorities and the economically disadvantaged.
An eligible institution may designate a foundation, which was established for the purpose of raising money for that institution, as the recipient of an endowment challenge grant if—
(a) The institution assures the Secretary in its application that the foundation is legally authorized to receive the endowment fund corpus and to administer the endowment fund in accordance with the regulations in this part;
(b) The foundation agrees to administer the endowment fund in accordance with the regulations in this part; and
(c) The institution agrees to be liable for any violation by the foundation of any applicable regulation, including any violation resulting in monetary liability.
(a) Except as provided in paragraphs (b) and (c) of this section, an institution that has received a grant under this part may apply for another grant under this part only after 10 fiscal years have elapsed following the fiscal year appropriation from which the institution's grant was awarded (base fiscal year).
(b) An institution that has received a grant under this part may apply for another grant under this part after five fiscal years have elapsed following the base fiscal year if the appropriation for this part exceeds $20 million in any of those five fiscal years.
(c) If an institution has received a grant under this part and the appropriation for this part exceeds $20 million in any of the sixth through tenth fiscal years following the base fiscal year, the institution may apply for another grant under this part in the fiscal year in which the appropriation exceeds $20 million, or any subsequent fiscal year.
(a) The following regulations apply to the Endowment Challenge Grant Program:
(1) The regulations in this part 628.
(2)-(3) [Reserved]
(b)(1) The Education Department General Administrative Regulations (EDGAR) as follows:
(i) The regulations in 34 CFR 74.61(h), or 34 CFR 80.26 and the appendix to 34 CFR part 80, as applicable.
(ii) The regulations in 34 CFR 74.80, 74.84, and 74.85.
(iii) The regulations in 34 CFR 75.100 through 75.102, and 75.217.
(iv) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(2) Except as specifically indicated in paragraph (b)(1) of this section, the Education Department General Administrative Regulations do not apply.
The following definitions apply to the regulations in this part:
Each endowment challenge grant awarded by the Secretary under this part—
(a) Must be matched by the institution receiving the grant with one dollar of non-Federal funds for every two dollars of Federal grant funds;
(b) Must be invested by the institution; and
(c) Must have a duration of 20 years.
An applicant shall include in its application the amount of the endowment challenge grant it is requesting, a description of its short-term plan and long-term plan for raising and using endowment challenge grant funds, and information sufficient for the Secretary to—
(a) Evaluate the application under the selection criteria set forth in § 628.31 and the priorities set forth in § 628.32; and
(b) Determine whether the applicant will administer the endowment challenge grant in accordance with the regulations in this part.
(a) In evaluating an application for an endowment challenge grant, the Secretary—
(1) Judges the application using the selection criteria in § 628.31 and the priorities in § 628.32;
(2) Gives, for each criterion and priority, a score up to the maximum possible points in parentheses following the description of that criterion or priority; and
(3) Gives up to 130 total points, 90 points maximum for the criteria in § 628.31, and 40 points maximum for the priorities in § 628.32.
(b) In selecting recipients for grants, the Secretary follows the procedures in
In evaluating an application for an endowment challenge grant, the Secretary uses the following three criteria:
(a) The Secretary measures the applicant's past efforts to build or maintain its existing endowment and quasi-endowment funds by the dollar and relative increase in market value to the applicant's existing endowment and quasi-endowment funds over the applicant's four fiscal years preceding the year of application using the formulas set forth in paragraphs (a)(1) through (a)(5) of this section.
(1) In measuring an applicant's dollar increase in its endowment and quasi-endowment funds, the Secretary—
(i) Subtracts from an amount equal to the market value of the applicant's endowment and quasi-endowment funds at the end of the four-year period described in paragraph (a) of this section an amount equal to the market value of the applicant's endowment and quasi-endowment funds at the beginning of that four-year period; and
(ii) Divides the result obtained in paragraph (a)(1)(i) of this section by the applicant's full-time equivalent enrollment at the end of the four-year period.
(2) The Secretary awards points on a sliding scale giving 10 points to applicants with the highest dollar increase as calculated in paragraph (a)(1) of this section and no points to applicants with the lowest dollar increase.
(3) In measuring an applicant's relative increase in market value of its endowment and quasi-endowment funds, the Secretary—
(i) Divides an amount equal to the market value of the applicant's endowment and quasi-endowment funds at the beginning of the four-year period described in paragraph (a) of this section by the applicant's full-time equivalent enrollment at the end of the four-year period.
(ii) Adds $50 to the amount obtained in paragraph (a)(3)(i) of this section.
(iii) Divides the result obtained in paragraph (a)(1)(ii) of this section by the amount obtained in paragraph (a)(3)(ii) of this section.
(4)(i) If the amount of endowment per full-time equivalent student under paragraph (a)(3)(i) of this section is $50 or more, the Secretary awards points on a sliding scale giving 15 points to applicants with a relative increase of 100 percent or more and no points to applicants that have had a relative decrease of more than 20 percent.
(ii) If the amount of endowment per full-time equivalent student under paragraph (a)(3)(i) of this section is less than $50, the Secretary awards points on a sliding scale giving 15 points to applicants with a relative increase of 100 percent or more and no points to applicants that have had no relative increase.
(5) In measuring the applicant's past effort, the Secretary—
(i) Excludes real estate from being considered as part of the applicant's existing endowment or quasi-endowment fund; and
(ii) Includes an endowment or quasi-endowment fund operated by a foundation if the foundation is tax-exempt and was established for the purpose of raising money for the institution.
(b) The Secretary considers the degree of proposed nongovernmental matching funds. (Total: 15 points maximum for the highest proposed percentage)
(1) The Secretary measures the degree to which an applicant proposes to match the grant with funds from sources other than a State or local government—giving up to 15 points to applicants proposing to obtain the largest percentage of matching funds from those nongovermental sources.
(2) If an applicant is applying for an endowment challenge grant for the first time, the Secretary multiplies the maximum number of points (i.e., 15 points) on this criterion times the following fraction:
(3) If an applicant has previously received an endowment challenge grant, the Secretary uses the following formula in awarding points under this criterion:
(c) The Secretary considers the need for an endowment challenge grant as measured by the applicant's lack of resources.
(1) The Secretary gives up to 50 points to applicants with the least resources as measured, at the end of the applicant's fiscal year preceding the year it applies for an endowment challenge grant, by revenue per full-time equivalent student it receives from the sum of the following—
(i) Federal, State and local government appropriations;
(ii) Unrestricted Federal, State and local government grants and contracts;
(iii) Eighty percent of tuition and fees; and
(iv) Unrestricted and restricted “endowment income”.
(2) In measuring the applicant's resources, the Secretary—
(i) Defines the factors in paragraphs (c)(1)(i) through (iv) as they are defined in the Education Department Higher Education General Information Survey of Financial Statistics.
(ii) Excludes real estate from being considered as part of the applicant's existing endowment or quasi-endowment fund.
In evaluating an endowment challenge grant application, the Secretary uses the following two priorities:
(a)
(b)
(1) The Secretary gives up to 20 total points to an applicant with the greatest need for an endowment challenge grant under this part, as measured by the applicant's lack of endowment funds.
(2) The Secretary gives up to 20 points to the applicant with the lowest market value, at the end of the applicant's fiscal year preceding the year it applies for an endowment challenge grant, of its existing endowment and quasi-endowment fund in relation to the number of full-time equivalent students enrolled at the institution in the fall of the year preceding the year it applies for an endowment challenge grant.
(3) In measuring the applicant's need for an endowment challenge grant, the Secretary excludes real estate from being considered as part of the applicant's existing endowment or quasi-endowment fund.
(a) To receive an endowment challenge grant, an institution must raise at least $25,000 in matching funds and qualify for at least a $50,000 grant under paragraph (c) of this section.
(b) If an institution obtains at least $25,000 in matching funds and raises all the nongovernmental funds it proposed to raise in its application, the institution may receive a grant equal to twice the amount of matching funds it raises up to—
(1) $500,000 in any fiscal year in which the amount appropriated for the Endowment Challenge Grant Program is less than $15,000,000;
(2) $1,000,000 in any fiscal year in which the amount appropriated for the Endowment Challenge Grant Program equals or exceeds $15,000,000 but is less than $25,000,000; or
(3) $1,500,000 in any fiscal year in which the amount appropriated for the Endowment Challenge Grant Program equals or exceeds $25,000,000.
(c) If an institution does not raise all the nongovernmental funds it proposes to raise in its application, the Secretary reduces the institution's grant by multiplying the grant amount requested by the following fraction:
(a) An institution that the Secretary selects to receive an endowment challenge grant shall—
(1) Enter into an agreement with the Secretary to administer the endowment challenge grant;
(2) Establish an endowment fund independent of any other endowment fund established by or for that institution;
(3) Deposit its matching funds in the endowment fund established under this part;
(4) Upon receipt, immediately deposit the grant funds into the endowment fund established under this part; and
(5) Within fifteen working days after receiving the grant funds, invest the endowment fund corpus.
(b) Before the Secretary disburses grant funds and not later than a date established by the Secretary through a notice in the
(1) Match, with cash or low-risk securities, the endowment challenge grant funds to be received under this part;
(2) Certify to the Secretary—
(i) The source, kind and amount of the eligible matching funds;
(ii) That the matching funds are eligible under paragraph (b)(1) of this section and § 628.42; and
(3) Have a certified public accountant or other licensed public accountant,
(c)(1) For the purpose of paragraph (b)(1) of this section, “cash” may include cash on hand, certificates of deposit and money market funds; and
(2) A negotiable security, to be considered as part of the institution's match—
(i) Must be low-risk as required in § 628.43; and
(ii) Must be assessed at its market value as of the end of the trading day on the date the institution deposits the security into the endowment fund established under this part.
To match an endowment challenge grant, a grantee may not use—
(a) A pledge of funds or securities;
(b) Deferred gifts such as a charitable remainder annuity trust or unitrust;
(c) Any Federal funds;
(d) Any borrowed funds; or
(e) The corpus or income of an endowment fund or quasi-endowment fund existing at the closing date established by the Secretary for submission of eligibility requests under the Endowment Challenge Grant Program. This includes the corpus or income of an endowment or quasi-endowment fund established by a foundation if the foundation is tax-exempt and was established for the purpose of raising money for the institution.
(a) A grantee shall invest, for the duration of the grant period, the endowment fund established under this part in savings accounts or in low-risk securities in which a regulated insurance company may invest under the law of the State in which the institution is located.
(b) When investing the endowment fund, the grantee shall exercise the judgment and care, under the circumstances, that a person of prudence, discretion and intelligence would exercise in the management of his or her own financial affairs.
(c) An institution may invest its endowment fund in savings accounts permitted under paragraph (a) of this section such as—
(1) A federally insured bank savings account;
(2) A comparable interest bearing account offered by a bank; or
(3) A money market fund.
(d) An institution may invest its endowment fund in low-risk securities permitted under paragraph (a) of this section such as—
(1) Certificates of deposit;
(2) Mutual funds;
(3) Stocks; or
(4) Bonds.
(e) An institution may not invest its endowment fund in real estate.
(a)(1) During the grant period, a grantee may not withdraw or spend any part of the endowment fund corpus.
(2) If, during the grant period, a grantee withdraws or spends all or part of the endowment fund corpus, it must repay to the Secretary an amount equal of 50 percent of the amount withdrawn or spent plus the income earned on that amount.
(b) At the end of the grant period, the institution may use the endowment fund corpus for any educational purpose.
(a) During the endowment challenge grant period, a grantee—
(1) May withdraw and spend up to 50 percent of the total aggregate endowment fund income earned prior to the date of expenditure;
(2) May spend the endowment fund income for—
(i) Costs necessary to operate the institution, including general operating and maintenance costs;
(ii) Costs to administer and manage the endowment fund; and
(iii) Costs associated with buying and selling securities, such as stockbroker commissions and fees to “load” mutual funds;
(3) May not use endowment fund income for—
(i) A school or department of divinity or any religious worship or sectarian activity;
(ii) An activity that is inconsistent with a State plan for desegregation applicable to the grantee; or
(iii) An activity that is inconsistent with a State plan applicable to the grantee; and
(4) May not withdraw or spend the remaining 50 percent of the endowment fund income.
(b) Notwithstanding paragraph (a)(1) of this section, the Secretary may permit a grantee that requests to spend more than 50 percent of the total aggregate endowment fund income to do so if the grantee demonstrates that the expenditure is necessary because of—
(1) A financial emergency such as a pending insolvency or temporary liquidity problem;
(2) A situation threatening the existence of the institution such as destruction due to a natural disaster or arson; or
(3) Another unusual occurrence or demanding circumstance, such as a judgment against the institution for which the institution would be liable.
(c) If, during the grant period, a grantee spends more endowment fund income or uses it for purposes other than permitted under paragraphs (a) or (b) of this section, it shall repay to the Secretary an amount equal to 50 percent of the amount improperly spent.
(d) At the end of the grant period, the institution may use all of the endowment fund income for any educational purpose.
A grantee shall calculate the amount of endowment fund income that it may withdraw and spend at a particular time as follows:
(a) On each date that the grantee plans a withdrawal of income, it must—
(1) Determine the value of endowment fund income by subtracting the endowment fund corpus from the current total value of the endowment fund on that date; and
(2) Calculate the amount of endowment fund income previously withdrawn from the endowment fund.
(b) If the value of endowment fund income in the endowment fund exceeds the aggregate amount of previously withdrawn endowment fund income, the grantee may withdraw and spend up to 50 percent of that excess fund income.
A grantee shall—
(a) Keep records of—
(1) The source, kind and amount of matching funds;
(2) The type and amount of investments of the endowment fund;
(3) The amount of endowment fund income; and
(4) The amount and purpose of expenditures of endowment fund income;
(b) Retain each year's records for a minimum of five years after the grant period ends;
(c) Allow the Secretary access to information that the Secretary judges necessary to audit or examine the records required in paragraph (a) of this section;
(d) Carry out the audit required in 34 CFR 74.61(h) or 80.26 and the appendix to 34 CFR part 80, as applicable;
(e) Provide to the Secretary a copy of the external or internal audit to be performed under 34 CFR 74.61(h) or 80.26 and the appendix to 34 CFR part 80, as applicable; and
(f) Submit reports on a timely basis that are requested by the Secretary.
(a) The Secretary may, after giving the grantee notice and an opportunity for a hearing, terminate an endowment challenge grant if the grantee—
(1) Withdraws or spends any part of the endowment fund corpus in violation of § 628.44(a)(1);
(2) Spends any portion of the endowment fund income not permitted to be spent in § 628.45;
(3) Fails to invest the endowment fund in accordance with the investment standards set forth in § 628.43; or
(4) Fails to meet the requirements in § 628.41.
(b) If the Secretary terminates a grant under paragraph (a) of this section, the grantee must return to the Secretary an amount equal to the sum of the original endowment challenge grant or grants plus the income earned on that sum.
20 U.S.C. 1136-1136h, unless otherwise noted.
The Urban Community Service Program provides grants to urban academic institutions to work with private and civic organizations to devise and implement solutions to pressing and severe problems in their urban communities.
The following institutions are eligible for grants under the Urban Community Service Program:
(a) A nonprofit municipal university, established by the governing body of the city in which it is located and operating as of July 23, 1992.
(b) An institution of higher education or a consortium of institutions with at least one member that satisfies all of the following requirements:
(1) Is located in an urban area.
(2) Draws a substantial portion of its undergraduate students from the urban area in which it is located or from contiguous areas.
(3) Carries out programs to make postsecondary educational opportunities more accessible to residents of the urban area or contiguous areas.
(4) Has the present capacity to provide resources responsive to the needs and priorities of the urban area and contiguous areas.
(5) Offers a range of professional, technical, or graduate programs sufficient to sustain the capacity of the institution to provide these resources.
(6) Has demonstrated and sustained a sense of responsibility to the urban area and contiguous areas and the people in those areas.
(a) The Secretary awards grants under this program for the following activities:
(1) Planning.
(2) Applied research.
(3) Training.
(4) Resource exchanges or technology transfers.
(5) Delivery of services.
(6) Other activities to design and implement programs to assist urban communities to meet and address their pressing and severe problems.
(b) Examples of pressing and severe urban problems that applications may address include concerns such as the following:
(1) Work force preparation.
(2) Urban poverty and the alleviation of poverty.
(3) Health care, including delivery and access.
(4) Underperforming school systems and students.
(5) Problems faced by the elderly and individuals with disabilities in urban settings.
(6) Problems faced by families and children.
(7) Campus and community crime prevention, including enhanced security and safety awareness measures as well as coordinated programs addressing the root causes of crime.
(8) Urban housing.
(9) Urban infrastructure.
(10) Economic development.
(11) Urban environmental concerns.
(12) Other problem areas that participants of the planning consortium agree are of high priority in the urban area in which their institutions are located.
(13) Problems faced by individuals with disabilities regarding accessibility to institutions of higher education and other public and private community facilities.
(14) Lessening of existing attitudinal barriers that prevent full inclusion of individuals with disabilities within their community.
The duration of an Urban Community Service Program grant is a maximum of five annual budget periods.
(a) The applicant and the local governments associated with its application shall contribute to the conduct of the project supported by the grant an amount, in cash or in-kind, from non-Federal funds equal to at least one-fourth of the amount of the grant.
(b) The applicant shall develop and include in its application a plan agreed to by the members of a planning consortium.
The following regulations apply to the Urban Community Service Program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 80 (Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments).
(6) 34 CFR part 82 (New Restrictions on Lobbying).
(7) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(8) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 636.
(a)
(b)
(i) Have physical or mental impairments that substantially limits one or more of the major life activities;
(ii) Have a record of physical or mental impairments; or
(iii) Are regarded as having physical or mental impairments.
(i) Is chartered or otherwise established as a not-for-profit institution by the governing body of the city in which it is located; and
(ii) Is accredited by an agency or association recognized by the Secretary.
(i) A community college.
(ii) An urban school system.
(iii) A local government.
(iv) A business or other employer.
(v) A nonprofit institution.
(i) A metropolitan area having a population of not less than 350,000;
(ii) Two contiguous metropolitan areas having a combined total population of not less than 350,000;
(iii) In any State that does not have a metropolitan area having a population of not less than 350,000, the one urban area designated by the entity of the State having an agreement under the HEA to make a designation; or
(iv) If a State entity does not have an agreement under the HEA to make a designation, the one urban area designated by the Secretary.
An application must include the following:
(a) A description of the activities for which the grant is sought.
(b) The plan agreed to by each of the members of the planning consortium.
(c) An assurance that the applicant and the local governments associated with the application will contribute to the conduct of the project supported by the grant an amount, in cash or in-kind, from non-Federal funds equal to at least one-fourth of the amount of the grant.
(a) An applicant may request that the Secretary waive the requirement for a planning consortium by submitting as part of the application a request that includes the following:
(1) The reasons why the applicant seeks the waiver.
(2) Detailed information evidencing the applicant's integrated and coordinated plan to work with private and civic organizations to meet the pressing and severe problems of the urban community.
(b) The Secretary may grant the request for a waiver if the Secretary finds that—
(1) The applicant has shown an integrated and coordinated plan to meet the purposes of the Urban Community Service Program; and
(2) A planning consortium would not substantially improve the applicant's proposed project.
(a) The Secretary evaluates an application on the basis of the selection criteria in § 636.21.
(b) The Secretary awards up to 100 points for these selection criteria.
(c) The maximum possible score for each criterion is indicated in parentheses.
The Secretary uses the following criteria to evaluate an application under this part:
(a)
(1) The process used to ensure that the pressing and severe problems that are identified are in fact high priority problems for the urban area;
(2) The priority relationship of the problems addressed by the project to other pressing and severe problems identified for the urban area;
(3) The extent to which the problems addressed by the project represent pressing and severe problems in urban areas nationally;
(4) The process by which project participants review and comment on proposed project goals, objectives, and strategies; and
(5) The specific benefits to be gained by meeting the identified problems.
(b)
(1) The cooperative arrangement between the applicant and any of the following that are appropriate for the conduct of the proposed project:
(i) Agencies of local government.
(ii) Public and private elementary and secondary schools.
(iii) Business organizations.
(iv) Labor organizations.
(v) Community service and advocacy organizations.
(vi) Community colleges.
(2)(i) Any previous working relationships between the applicant and the entities listed in paragraph (b)(1) of this section; and
(ii) The outcomes of those relationships.
(3) The agreement among project participants to commit their own resources in carrying out proposed project goals, objectives, and strategies.
(c)
(d)
(1) The implementation strategy for each key project component activity is—
(i) Comprehensive;
(ii) Based on a sound rationale; and
(iii) Is a cost-effective approach for accomplishing project goals and objectives; and
(2) The described timetable for each project component and for the overall project is realistic.
(e)
(1) Relate to the objectives of the project;
(2) Describe both process and product evaluation measures for each project component activity and outcome;
(3) Describe data collection procedures, instruments, and schedules for effective data collection;
(4) Describe how the data will be analyzed and reported so that adjustments and improvements can be made on a regular basis while the project is in operation;
(5) Describe a time-line chart that relates key evaluation processes and benchmarks to other project component processes and benchmarks; and
(6) Establish the potential for effectively disseminating project information that can be generalized, replicated, and applied throughout the Nation.
(f)
(1) The past work experience and training of key professional personnel are directly related to the stated activity purposes and objectives; and
(2) The time commitment of key personnel is realistic.
(g)
(1) The budget for the project is adequate to support the project activities; and
(2) The costs are necessary and reasonable in relation to the project objectives and scope.
(h)
(a) The Secretary awards grants in a manner that achieves an equitable geographic distribution of grants.
(b) No institution, individually or as a participant in a consortium of institutions, may receive an Urban Community Service Program grant for more than five years.
In awarding grants, the Secretary gives an absolute preference to applicants that propose to conduct joint projects supported by other local, State, and Federal programs.
(a) The Secretary identifies and designates the eligible institutions described in § 636.2 as urban grant institutions.
(b) The Secretary publishes a list of urban grant institutions in a notice published in the
(a) The Secretary establishes a network of urban grant institutions consisting of the urban grant institutions designated in § 636.30.
(b) The Secretary invites institutions in the network of urban grant institutions to disseminate results and other information on individual projects that can be generalized, replicated, and applied throughout the Nation.
20 U.S.C. 1067-1067c, 1067g-1067k, 1068, 1068b, unless otherwise noted.
The Minority Science and Engineering Improvement Program (MSEIP) is designed to effect long-range improvement in science and engineering education at predominantly minority institutions, and to increase the flow of underrepresented ethnic minorities,
The following are eligible to receive a grant under this part:
(a) Public and private nonprofit institutions of higher education that—
(1) Award baccalaureate degrees; and
(2) Qualify as minority institutions as defined in § 637.4.
(b) Public or private nonprofit institutions of higher education that—
(1) Award associate degrees;
(2) Qualify as minority institutions as defined in § 637.4;
(3) Have a curriculum that includes science or engineering subjects; and
(4) Enter into a partnership with public or private nonprofit institutions of higher education that award baccalaureate degrees in science and engineering.
(c) Nonprofit science-oriented organizations, professional scientific societies, and institutions of higher education that award baccalaureate degrees that—
(1) Provide a needed service to a group of minority institutions; or
(2) Provide in-service training to project directors, scientists, and engineers from minority institutions; or
(d) A consortia of organizations, that provide needed services to one or more minority institutions. The consortia membership may include—
(1) Institutions of higher education which have a curriculum in science or engineering;
(2) Institutions of higher education that have a graduate or professional program in science or engineering;
(3) Research laboratories of, or under the contract with, the Department of Energy;
(4) Private organizations that have science or engineering facilities; or
(5) Quasi-governmental entities that have a significant scientific or engineering mission.
The following regulations apply to the Minority Science and Engineering Improvement Program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 637.
(a)
(b)
The Secretary awards grants under this program for all or some of the following categories of projects:
(a) Institutional projects for implementing a comprehensive science improvement plan as described in § 637.12.
(b) Design projects for developing a long-range science improvement plan as described in § 637.13.
(c) Special projects to support activities as described in § 637.14.
(d) Cooperative projects to share facilities and personnel and disseminate information as described in § 637.15.
(a) Institutional project grants support the implementation of a comprehensive science improvement plan, which may include any combination of activities for improving the preparation of minority students, particularly minority women, for careers in science.
(b) Activities that the Secretary may assist under an institutional project include, but are not limited to, the following:
(1) Faculty development programs; or
(2) Development of curriculum materials.
(a) Design project grants assist minority institutions that do not have their own appropriate resources or personnel to plan and develop long-range science improvement programs.
(b) Activities that the Secretary may assist under a design project include, but are not limited to, the following:
(1) Development of planning, management, and evaluation systems; and
(2) Improvement of institutional research or development offices.
There are two types of special projects grants—
(a) Special project grants for which minority institutions are eligible which support activities that—
(1) Improve quality training in science and engineering at minority institutions; or
(2) Enhance the minority institutions’ general scientific research capabilities.
(b) Special project grants for which all applicants are eligible which support activities that—
(1) Provide a needed service to a group of eligible minority institutions; or
(2) Provide in-service training for project directors, scientists, and engineers from eligible minority institutions.
(c) Activities that the Secretary may assist under a special project include, but are not limited to, the following:
(1) Advanced science seminars;
(2) Science faculty workshops and conferences;
(3) Faculty training to develop specific science research or education skills;
(4) Research in science education;
(5) Programs for visiting scientists;
(6) Preparation of films or audio-visual materials in science;
(7) Development of learning experiences in science beyond those normally available to minority undergraduate students, particularly minority women;
(8) Development of pre-college enrichment activities in science; and
(9) Any other activities designed to address specific barriers to the entry of minorities, particularly minority women, into science.
(d) Minority institutions are eligible to apply for special projects of the type listed in paragraph (a) of this section. All applicants eligible for assistance under this program may apply for special projects of the type listed in paragraphs (b) and (c) of this section.
(a) Cooperative project grants assist groups of nonprofit accredited colleges and universities to work together to conduct a science improvement project.
(b) Activities that the Secretary may fund under cooperative projects include, but are not limited to, the following:
(1) Assisting institutions in sharing facilities and personnel;
(2) Disseminating information about established programs in science and engineering;
(3) Supporting cooperative efforts to strengthen the institutions’ science and engineering programs; and
(4) Carrying out a combination of any of the activities in paragraphs (c)(1)-(3) of this section.
(c) Eligible applicants for cooperative projects are groups of nonprofit accredited colleges and universities whose primary fiscal agent is an eligible minority institution as defined in § 637.4(b).
One applies for a grant under the procedures of EDGAR §§ 75.100 through 75.129.
(a) The Secretary evaluates an application on the basis of the criteria in § 637.32.
(b) The Secretary awards up to 100 points for these criteria.
(c) The maximum possible score of each criterion is indicated in parentheses.
(d) The Secretary gives priority to applicants which have not previously received funding from the program and to previous grantees with a proven record of success, as well as to applications that contribute to achieving balance among funded projects with respect to:
(1) Geographic region;
(2) Academic discipline; and
(3) Project type.
The Secretary evaluates applications using the following criteria:
(a)
(2) The Secretary looks for information that shows—
(i) Higher quality in the design of the project;
(ii) An effective plan of management that insures proper and efficient administration of the project;
(iii) A clear description of how the objectives of the project relate to the purpose of the program;
(iv) The way the applicant plans to use its resources and personnel to achieve each objective; and
(v) Methods of coordination. (See EDGAR 34 CFR 75.581)
(b)
(2) The Secretary looks for information that shows—
(i) The qualifications of the project director (if one is to be used);
(ii) The qualifications of each of the other key personnel to be used in the project;
(iii) The time that each person referred to in paragraphs (b)(2) (i) and (ii) of this section plans to commit to the project.
(iv) The extent to which the applicant, as part of its nondiscriminatory emloyment practices, encourages applications for employment from persons who are members of groups that have been traditionally underrepresented, such as members of a racial or ethnic minority groups, women, handicapped persons, and the elderly.
(3) To determine the qualifications of a person, the Secretary considers evidence of past experience and training, in fields related to the objectives of the project, as well as other information that the applicant provides.
(c)
(2) The Secretary looks for information that shows—
(i) The budget for the project is adequate to support the project activities; and
(ii) Costs are reasonable in relation to the objective of the project.
(d)
(2) The Secretary looks for information that shows methods of evaluation that are appropriate for the project and, to the extent possible, are objective and produce data that are quantifiable.
(e)
(2) The Secretary looks for information that shows—
(i) The facilities that the applicant plans to use are adequate; and
(ii) The equipment and supplies that the applicant plans to use are adequate.
(f)
(2) The Secretary looks for information that shows—
(i) An adequate needs assessment;
(ii) An identification of specific needs in science; and
(iii) An involvement of appropriate individual, especially science faculty, in identifying the institutional needs.
(g)
(2) The Secretary looks for information that shows—
(i) For an institutional or cooperative project, the extent to which both
(ii) For a design project, the extent to which realistic long-range science education improvement plans will be developed with the technical assistance provided under the project; or
(iii) For a special project, the extent to which it addresses needs that have not been adequately addressed by an existing institutional science program or takes a particularly new and exemplary approach that has not been taken by any existing institutional science program.
(h)
(2) The Secretary looks for information that shows—
(i) Adequate institutional commitment to absorb any after-the-grant burden initiated by the project;
(ii) Adequate plans for continuation of project activities when funding ceases;
(iii) Clear evidence of past institutional commitment to the provision of quality science programs for its minority students; and
(iv) A local review statement signed by the chief executive officer of the institution endorsing the project and indicating how the project will accelerate the attainment of the institutional goals in science.
(i)
(2) The Secretary looks for information that shows—
(i) Expected outcomes likely to result in the accomplishment of the program goal;
(ii) Educational value for science students; and
(iii) Possibility of long-term benefits to minority students, faculty, or the institution.
(j)
(2) The Secretary looks for information that shows—
(i) The relationship of the proposed project to the present state of science education;
(ii) The use or development of effective techniques and approaches in science education; and
(iii) Potential use of some aspects of the project at other institutions.
For design project grants funds may not be used to pay more than fifty percent of the academic year salaries of faculty members involved in the project.
20 U.S.C. 1070a-11 and 1070a-17, unless otherwise noted.
The Training Program for Federal TRIO Programs—referred to in these regulations as the Training Program—provides Federal financial assistance to train the staff and leadership personnel employed in, or preparing for employment in, Federal TRIO Program projects.
The following are eligible to apply for a grant to carry out a Training Program project:
(a) Institutions of higher education.
(b) Public and private nonprofit agencies and organizations.
The following are eligible for training under this program:
(a) Leadership personnel and full and part-time staff members of projects under the Federal TRIO Programs.
(b) Individuals preparing for employment as staff or leadership personnel in projects under the Federal TRIO Programs.
The following regulations apply to the Training Program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 642.
(a)
(b)
(a) A Training Program project trains the staff and leadership personnel of Federal TRIO Program projects to enable them to more effectively operate those projects.
(b) A Training Program project may include conferences, internships, seminars, workshops, and the publication of manuals designed to improve the operations of Federal TRIO Program projects.
(c) Each year, one or more Training Program projects must provide training for new project directors.
(d) Each year, one or more Training Program projects must offer training covering the following topics:
(1) The legislative and regulatory requirements for operating Federal TRIO Programs.
(2) Assisting students to obtain adequate student financial assistance from programs authorized under Title IV of the Act, as well as from other sources.
(3) The design and operation of model Federal TRIO Program projects.
(a) The Secretary evaluates an application on the basis of the criteria in § 642.31.
(1) The Secretary awards up to 100 points for these criteria.
(2) The maximum possible score for each complete criterion is indicated in the parentheses next to the heading of that criterion.
(b) In addition, for applicants that have conducted a Training Program project within the three fiscal years prior to the fiscal year for which the applicant is applying, the Secretary considers the experience of the applicant on the basis of § 642.32.
The Secretary uses the criteria in paragraphs (a) through (f) of this section to evaluate applications:
(a)
(2) The Secretary looks for information that shows—
(i) High quality in the design of the project;
(ii) An effective plan of managment that insures proper and efficient administration of the project;
(iii) A clear description of how the objectives of the project relate to the purpose of the program;
(iv) The way the applicant plans to use its resources and personnel to achieve each objective; and
(v) A clear description of how the applicant will provide equal access and treatment for eligible project participants who are members of groups that have been traditionally underrepresented, such as—
(A) Members of racial or ethnic minority groups;
(B) Women;
(C) Handicapped persons; and
(D) The elderly.
(b)
(2) The Secretary looks for information that shows—
(i) The qualifications of the project director;
(ii) The qualifications of each of the other key personnel to be used in the project;
(iii) The time that each person referred to in paragraphs (b)(2)(i) and (ii) of this section plans to commit to the project; and
(iv) The extent to which the applicant, as part of its nondiscriminatory employment practices, encourages applications for employment from persons who are members of groups that have been traditionally underrepresented, such as—
(A) Members of racial or ethnic minority groups;
(B) Women;
(C) Handicapped persons; and
(D) The elderly.
(3) To determine the qualifications of a person, the Secretary considers evidence of past experience and training, in fields related to the objectives of the project, as well as other information that the applicant provides.
(c)
(2) The Secretary looks for information that shows—
(i) The budget for the project is adequate to support the project activities; and
(ii) Costs are reasonable in relation to the objectives of the project.
(d)
(2) The Secretary looks for information that shows methods of evaluation that are appropriate for the project and, to the extent possible, are objective and produce data that are quantifiable.
(e)
(1) The Secretary reviews each application for information that shows that the applicant plans to devote adequate resources to the project.
(2) The Secretary looks for information that shows—
(i) The facilities that the applicant plans to use are adequate; and
(ii) The equipment and supplies that the applicant plans to use are adequate.
(f)
(2) The Secretary looks for information that shows—
(i) The extent to which the proposed training addresses a specific need not addressed by other training projects available to Federal TRIO Programs personnel;
(ii) The extent to which the proposed training addresses a significant training need in the region(s) to be served; and
(iii) The extent to which the proposed training addresses needs that are consistent with the topics required by statute and other topics chosen as priorities by the Secretary as authorized under § 642.34.
At 58 FR 51519, Oct. 1, 1993 in § 642.31, paragraph (f)(2)(i) was amended by removing “Special Programs” and adding “Federal TRIO Programs” in their place, and (f)(2)(iii) was revised. This section contains information collection and recordkeeping requirements and will not become effective until approval has been given by the Office of Management and Budget.
(a)(1) The Secretary gives priority to each applicant that has conducted a Training Program project under title IV-A-4 of the Higher Education Act within the three fiscal years prior to the fiscal year for which the applicant is applying.
(2) To determine the number of priority points to be awarded each eligible applicant, the Secretary considers the applicant's prior experience of service delivery in accordance with paragraphs (b) and (c) of this section.
(b)(1) The Secretary may add from one to eight points to the point score obtained on the basis of the selection
(2) The maximum possible score for each criterion is indicated in the parentheses preceding the criterion.
(c) The Secretary—based on information contained in one or more of the following: Performance reports, audit reports, training site visit reports, evaluations by participants, project evaluation reports, the previously funded application, the negotiated program plan(s), and the application under consideration—looks for information that shows—
(1) (2 points) The extent to which the project has served the number and kinds of training participants it was funded to serve;
(2) (2 points) The extent to which participants benefited from training in areas such as—
(i) Increased qualifications and skills in meeting the needs of disadvantaged students; and
(ii) Increased knowledge and understanding of the Federal TRIO Programs;
(3) (2 points) The extent to which the applicant has achieved other goals and objectives as stated in the previously funded application or negotiated program plan; and
(4) (2 points) The extent to which the applicant has met the administrative requirements—including recordkeeping, reporting, and financial accountability—under the terms of the previously funded award.
The Secretary, to the greatest extent possible, awards grants for Training Program projects that will be carried out in all of the regions of the Nation in order to assure accessibility to prospective training participants.
(a) The Secretary, after consultation with regional and State professional associations of persons having special knowledge with respect to the training needs of Special Programs personnel, may select one or more of the following subjects as training priorities:
(1) Basic skills instruction in reading, mathematics, written and oral communication, and study skills.
(2) Counseling.
(3) Assessment of student needs.
(4) Academic tests and testing.
(5) College and university admissions policies and procedures.
(6) Student financial aid.
(7) Cultural enrichment programs.
(8) Career planning.
(9) Tutorial programs.
(10) Retention and graduation strategies.
(11) Support services for persons of limited proficiency in English.
(12) Support services for physically handicapped persons.
(13) Strategies for preparing students for doctoral studies.
(14) Project evaluation.
(15) Budget management.
(16) Personnel management.
(17) Reporting student and project performance.
(18) Coordinating project activities with other available resources and activities.
(19) General project management for new directors.
(20) Legislative and regulatory requirements for the operation of programs.
(21) The design and operation of model programs for projects funded under the Federal TRIO Programs.
(b) The Secretary annually funds training on the subjects listed in paragraphs (a)(6), (19), (20), and (21) of this section.
(c) The Secretary may consider an application for a Training Program project that does not address one of the established priorities if the applicant addresses another significant training need in the local area being served by the Federal TRIO Programs.
Allowable project costs may include the following costs reasonably related to carrying out a Training Program project:
(a) Rental of space, if space is not available at a sponsoring institution and if the space is not owned by a sponsoring institution.
(b) Printing.
(c) Postage.
(d) Purchase or rental of equipment if approved in writing by the Secretary.
(e) Consumable supplies.
(f) Transportation costs for participants and training staff.
(g) Lodging and subsistence costs for participants and training staff.
(h) Transportation costs, lodging and subsistence costs and fees for consultants, if any.
(i) Honorariums for speakers who are not members of the staff or consultants to the project.
(j) Other costs that are specifically approved in advance and in writing by the Secretary.
Costs that may not be charged against a grant under this program include the following:
(a) Research not directly related to the evaluation or improvement of the project.
(b) Construction, renovation, or remodeling of any facilities.
(c) Stipends, tuition fees, and other direct financial assistance to trainees other than those participating in internships.
20 U.S.C. 1070a-11 and 1070a-12, unless otherwise noted.
The Talent Search program provides grants for projects designed to—
(a) Identify qualified youths with potential for education at the postsecondary level and encourage them to complete secondary school and undertake a program of postsecondary education;
(b) Publicize the availability of student financial assistance for persons who seek to pursue postsecondary education; and
(c) Encourage persons who have not completed education programs at the secondary or postsecondary level, but who have the ability to do so, to reenter these programs.
The following are eligible for a grant to carry out a Talent Search project:
(a) An institution of higher education.
(b) A public or private agency or organization.
(c) A combination of the types of institutions, agencies, and organizations described in paragraphs (a) and (b) of this section.
(d) A secondary school, under exceptional circumstances such as if no institution, agency, or organization described in paragraphs (a) and (b) of this section is capable of carrying out a Talent Search project in the target area to be served by the proposed project.
(a) An individual is eligible to participate in a Talent Search project if the individual meets all the following requirements:
(1)(i) Is a citizen or national of the United States;
(ii) Is a permanent resident of the United States;
(iii) Is in the United States for other than a temporary purpose and provides evidence from the Immigration and Naturalization Service of his or her intent to become a permanent resident;
(iv) Is a permanent resident of Guam, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands (Palau); or
(v) Is a resident of the Freely Associated States—the Federated States of Micronesia or the Republic of the Marshall Islands.
(2)(i) Has completed five years of elementary education or is at least 11 years of age but not more than 27 years of age.
(ii) However, an individual who is more than 27 years of age may participate in a Talent Search project if the individual cannot be appropriately served by an Educational Opportunity Center project under 34 CFR part 644 and if the individual's participation would not dilute the Talent Search project's services to individuals described in paragraph (a)(2)(i) of this section.
(3)(i) Is enrolled in or has dropped out of any grade from six through 12, or has graduated from secondary school, has potential for a program of postsecondary education, and needs one or more of the services provided by the project in order to undertake such a program; or
(ii) Has undertaken, but is not presently enrolled in, a program of postsecondary education, has the ability to complete such a program, and needs one or more of the services provided by the project to reenter such a program.
(b) A veteran as defined in § 643.6(b), regardless of age, is eligible to participate in a Talent Search project if he or she satisfies the eligibility requirements in paragraph (a) of this section other than the age requirement in paragraph (a)(2).
A Talent Search project may provide the following services:
(a) Academic advice and assistance in secondary school and college course selection.
(b) Assistance in completing college admission and financial aid applications.
(c) Assistance in preparing for college entrance examinations.
(d) Guidance on secondary school reentry or entry to other programs leading to a secondary school diploma or its equivalent.
(e) Personal and career counseling.
(f) Tutorial services.
(g) Exposure to college campuses as well as cultural events, academic programs, and other sites or activities not usually available to disadvantaged youth.
(h) Workshops and counseling for parents of students served.
(i) Mentoring programs involving elementary or secondary school teachers, faculty members at institutions of higher education, students, or any combination of these persons.
(j) Activities described in paragraphs (a) through (i) of this section that are specifically designed for students of limited English proficiency.
(k) Other activities designed to meet the purposes of the Talent Search program stated in § 643.1, including activities to meet the specific educational needs of individuals in grades six through eight.
(a) Except as provided in paragraph (b) of this section, a project period under the Talent Search program is four years.
(b) The Secretary approves a project period of five years for applications that score in the highest ten percent of all applications approved for new grants under the criteria in § 643.21.
The following regulations apply to the Talent Search program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs), except for § 75.511.
(3) 34 CFR part 77 (Definitions That Apply to Department Regulations), except for the definition of “secondary school” in § 77.1.
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 643.
(a)
(b)
(1) Is determined to be eligible to participate in the project under § 643.3; and
(2) Receives project services designed for his or her age or grade level.
(1) An individual neither of whose natural or adoptive parents received a baccalaureate degree;
(2) An individual who, prior to the age of 18, regularly resided with and received support from only one parent and whose supporting parent did not receive a baccalaureate degree; or
(3) An individual who, prior to the age of 18, did not regularly reside with or receive support from a natural or an adoptive parent.
(1) For a period of more than 180 days, any part of which occurred after January 31, 1955, and who was discharged or released from active duty under conditions other than dishonorable; or
(2) After January 31, 1955, and who was discharged or released from active duty because of a service-connected disability.
An applicant shall submit, as part of its application, assurances that—
(a) At least two-thirds of the individuals it serves under its proposed Talent Search project will be low-income individuals who are potential first-generation college students;
(b) Individuals who are receiving services from another Talent Search project or an Educational Opportunity Center project under 34 CFR part 644 will not receive services under the proposed project;
(c) The project will be located in a setting or settings accessible to the individuals proposed to be served by the project; and
(d) If the applicant is an institution of higher education, it will not use the project as a part of its recruitment program.
(a) The Secretary evaluates an application for a new grant as follows:
(1)(i) The Secretary evaluates the application on the basis of the selection criteria in § 643.21.
(ii) The maximum score for all the criteria in § 643.21 is 100 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(2)(i) For an application for a new grant to continue to serve substantially the same populations or campuses that the applicant is serving under an expiring project, the Secretary evaluates the applicant's prior experience in delivering services under the expiring project on the basis of the criteria in § 643.22.
(ii) The maximum score for all the criteria in § 643.22 is 15 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(3) The Secretary awards additional points equal to 10 percent of the application's score under paragraphs (a)(1) and (2) of this section to an application for a project in Guam, the Virgin Islands, American Samoa, the Trust Territory of the Pacific Islands (Palau), or the Northern Mariana Islands if the applicant meets the requirements of subparts A, B, and D of this part.
(b) The Secretary makes new grants in rank order on the basis of the applications’ total scores under paragraphs (a)(1) through (3) of this section.
(c) If the total scores of two or more applications are the same and there are insufficient funds for these applications after the approval of higher-ranked applications, the Secretary uses the remaining funds to serve geographic areas and eligible populations that have been underserved by the Talent Search program.
(d) The Secretary may decline to make a grant to an applicant that carried out a project that involved the fraudulent use of funds under section 402A(c)(2)(B) of the HEA.
The Secretary uses the following criteria to evaluate an application for a new grant:
(a)
(1) A high number or percentage, or both, of low-income families residing in the target area;
(2) A high number or percentage, or both, of individuals residing in the target area with education completion levels below the baccalaureate level;
(3) A high student dropout rate in the proposed target schools in the preceding three years;
(4) A low rate of enrollment in programs of postsecondary education by
(5) A high ratio of students to school counselors in the target schools; and
(6) Other indicators of need for a Talent Search project, including the presence of unaddressed academic or socio-economic problems of students in the target schools or the target area.
(b)
(1) Include both process and outcome objectives relating to each of the purposes of the Talent Search program stated in § 643.1;
(2) Address the needs of the target area;
(3) Are clearly described, specific, and measurable; and
(4) Are ambitious but attainable within each budget period and the project period given the project budget and other resources.
(c)
(1) (4 points) The plan to inform the residents, schools, and community organizations in the target area of the goals, objectives, and services of the project and the eligibility requirements for participation in the project;
(2) (4 points) The plan to identify and select eligible participants and ensure their participation without regard to race, color, national origin, gender, or disability;
(3) (2 points) The plan to assess each participant's need for services provided by the project;
(4) (12 points) The plan to provide services that meet participants’ needs and achieve the objectives of the project; and
(5) (8 points) The plan, including the project's organizational structure and the time committed to the project by the project director and other personnel, to ensure the proper and efficient administration of the project.
(d)
(1) (8 points) Facilities, equipment, supplies, personnel, and other resources committed by the applicant; and
(2) (8 points) Resources secured through written commitments from schools, community organizations, and others.
(e)
(i) The qualifications required of the project director.
(ii) The qualifications required of each of the other personnel to be used in the project.
(iii) The plan to employ personnel who have succeeded in overcoming the disadvantages of circumstances like those of the population of the target area.
(2) In evaluating the qualifications of a person, the Secretary considers his or her experience and training in fields related to the objectives of the project.
(f)
(g)
(1) Are appropriate to the project's objectives;
(2) Provide for the applicant to determine, using specific and quantifiable measures, the success of the project in—
(i) Making progress toward achieving its objectives (a formative evaluation); and
(ii) Achieving its objectives at the end of the project period (a summative evaluation); and
(3) Provide for the disclosure of unanticipated project outcomes, using quantifiable measures if appropriate.
(a) In the case of an application described in § 643.20(a)(2)(i), the Secretary reviews information relating to an applicant's performance under its expiring Talent Search project. This information includes performance reports, audit reports, site visit reports, and project evaluation reports.
(b) The Secretary evaluates the applicant's prior experience in delivering services on the basis of the following criteria:
(1) (3 points) (i) Whether the applicant provided services to the number of participants required to be served under the approved application; and
(ii) Whether two-thirds of all participants served were low-income individuals and potential first-generation college students.
(2) (6 points) The extent to which the applicant met or exceeded its objectives regarding the retention, reentry, and graduation levels of secondary school participants.
(3) (6 points) The extent to which the applicant met or exceeded its objectives regarding the admission or reentry of participants to programs of postsecondary education.
(a) The Secretary sets the amount of a grant on the basis of—
(1) 34 CFR 75.232 and 75.233, for new grants; and
(2) 34 CFR 75.253, for the second and subsequent years of a project period.
(b) If the circumstances described in section 402A(b)(3) of the HEA exist, the Secretary uses the available funds to set the amount of the grant beginning in fiscal year 1994 at the lesser of—
(1) $180,000; or
(2) The amount requested by the applicant.
The cost principles that apply to the Talent Search program are in 34 CFR part 74, subpart Q. Allowable costs include the following if they are reasonably related to the objectives of the project:
(a) Transportation, meals, and, if necessary, lodging for participants and staff for—
(1) Visits to postsecondary educational institutions to obtain information relating to the admission of participants to those institutions;
(2) Participation in “College Day” activities; and
(3) Field trips to observe and meet with persons who are employed in various career fields in the target area and who can act as role models for participants.
(b) Purchase of testing materials.
(c) Fees required for college admissions applications or entrance examinations if—
(1) A waiver of the fee is unavailable; and
(2) The fee is paid by the grantee to a third party on behalf of a participant.
(d) In-service training of project staff.
(e) Rental of space if—
(1) Space is not available at the site of the grantee; and
(2) The rented space is not owned by the grantee.
(f) Purchase of computer hardware, computer software, or other equipment for student development, project administration, and recordkeeping, if the applicant demonstrates to the Secretary's satisfaction that the equipment is required to meet the objectives of the project more economically or efficiently.
Costs that are unallowable under the Talent Search program include, but are not limited to, the following:
(a) Tuition, stipends, and other forms of direct financial support for participants.
(b) Application fees for financial aid.
(c) Research not directly related to the evaluation or improvement of the project.
(d) Construction, renovation, and remodeling of any facilities.
(a)
(2) A grantee shall determine the status of a low-income individual on the basis of the documentation described in section 402A(e) of the HEA.
(b)
(c)
(1) The basis for the grantee's determination that the participant is eligible to participate in the project under § 643.3;
(2) The grantee's needs assessment for the participant;
(3) The services that are provided to the participant; and
(4) The specific educational progress made by the participant as a result of the services.
(d)
(2) The grantee shall give the project director sufficient authority to administer the project effectively.
(3) The Secretary waives the requirement in paragraph (d)(1) of this section if the applicant demonstrates that the requirement will hinder coordination—
(i) Among the Federal TRIO Programs (sections 402A through 402F of the HEA); or
(ii) Between the programs funded under sections 402A through 410 of the HEA and similar programs funded through other sources.
20 U.S.C. 1070a-11 and 1070a-16, unless otherwise noted.
The Educational Opportunity Centers program provides grants for projects designed to provide—
(a) Information regarding financial and academic assistance available for individuals who desire to pursue a program of postsecondary education; and
(b) Assistance to individuals in applying for admission to institutions that offer programs of postsecondary education, including assistance in preparing necessary applications for use by admissions and financial aid officers.
The following are eligible for a grant to carry out an Educational Opportunity Centers project:
(a) An institution of higher education.
(b) A public or private agency or organization.
(c) A combination of the types of institutions, agencies, and organizations described in paragraphs (a) and (b) of this section.
(d) A secondary school, under exceptional circumstances such as if no institution, agency, or organization described in paragraphs (a) and (b) of this section is capable of carrying out an Educational Opportunity Centers project in the target area to be served by the proposed project.
(a) An individual is eligible to participate in an Educational Opportunity Centers project if the individual meets all of the following requirements:
(1)(i) Is a citizen or national of the United States;
(ii) Is a permanent resident of the United States;
(iii) Is in the United States for other than a temporary purpose and provides evidence from the Immigration and Naturalization Service of his or her intent to become a permanent resident;
(iv) Is a permanent resident of Guam, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands (Palau); or
(v) Is a resident of the Freely Associated States—the Federated States of Micronesia or the Republic of the Marshall Islands.
(2)(i) Is at least 19 years of age; or
(ii) Is less than 19 years of age, and the individual cannot be appropriately served by a Talent Search project under 34 CFR part 643, and the individual's participation would not dilute the Educational Opportunity Centers project's services to individuals described in paragraph (a)(2)(i) of this section.
(3) Expresses a desire to enroll, or is enrolled, in a program of postsecondary education, and requests information or assistance in applying for admission to, or financial aid for, such a program.
(b) A veteran as defined in § 644.7(b), regardless of age, is eligible to participate in an Educational Opportunity Centers project if he or she satisfies the eligibility requirements in paragraph (a) of this section other than the age requirement in paragraph (a)(2) of this section.
An Educational Opportunity Centers project may provide the following services:
(a) Public information campaigns designed to inform the community about opportunities for postsecondary education and training.
(b) Academic advice and assistance in course selection.
(c) Assistance in completing college admission and financial aid applications.
(d) Assistance in preparing for college entrance examinations.
(e) Guidance on secondary school reentry or entry to a General Educational Development (GED) program or other alternative education program for secondary school dropouts.
(f) Personal counseling.
(g) Tutorial services.
(h) Career workshops and counseling.
(i) Mentoring programs involving elementary or secondary school teachers, faculty members at institutions of higher education, students, or any combination of these persons.
(j) Activities described in paragraphs (a) through (i) of this section that are specifically designed for students of limited English proficiency.
(k) Other activities designed to meet the purposes of the Educational Opportunity Centers program stated in § 644.1.
(a) Except as provided in paragraph (b) of this section, a project period under the Educational Opportunity Centers program is four years.
(b) The Secretary approves a project period of five years for applications that score in the highest ten percent of all applications approved for new grants under the criteria in § 644.21.
The following regulations apply to the Educational Opportunity Centers program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs), except for § 75.511.
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations), except for the definition of “secondary school” in § 77.1.
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 644.
(a)
(b)
(i) Is determined to be eligible to participate in the project under § 644.3; and
(ii) Receives project services.
(i) An individual neither of whose parents received a baccalaureate degree; or
(ii) An individual who regularly resided with and received support from only one parent and whose supporting parent did not receive a baccalaureate degree.
(i) For a period of more than 180 days, any part of which occurred after January 31, 1955, and who was discharged or released from active duty under conditions other than dishonorable; or
(ii) After January 31, 1955, and who was discharged or released from active duty because of a service-connected disability.
An applicant shall submit, as part of its application, assurances that—
(a) At least two-thirds of the individuals it serves under its proposed Educational Opportunity Centers project will be low-income individuals who are potential first-generation college students;
(b) Individuals who are receiving services from another Educational Opportunity Centers project or a Talent Search project under 34 CFR part 643 will not receive services under the proposed project;
(c) The project will be located in a setting or settings accessible to the individuals proposed to be served by the project; and
(d) If the applicant is an institution of higher education, it will not use the project as a part of its recruitment program.
(a) The Secretary evaluates an application for a new grant as follows:
(1)(i) The Secretary evaluates the application on the basis of the selection criteria in § 644.21.
(ii) The maximum score for all the criteria in § 644.21 is 100 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(2)(i) For an application for a new grant to continue to serve substantially the same populations or campuses that the applicant is serving under an expiring project, the Secretary evaluates the applicant's prior experience in delivering services under the expiring project on the basis of the criteria in § 644.22.
(ii) The maximum score for all the criteria in § 644.22 is 15 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(3) The Secretary awards additional points equal to 10 percent of the application's score under paragraphs (a) (1) and (2) of this section to an application for a project in Guam, the Virgin Islands, American Samoa, the Trust Territory of the Pacific Islands (Palau), or the Northern Mariana Islands if the applicant meets the requirements of subparts A, B, and D of this part.
(b) The Secretary makes new grants in rank order on the basis of the applications’ total scores under paragraphs (a) (1) through (3) of this section.
(c) If the total scores of two or more applications are the same and there are insufficient funds for these applications after the approval of higher-ranked applications, the Secretary uses the remaining funds to serve geographic areas and eligible populations that have been underserved by the Educational Opportunity Centers program.
(d) The Secretary may decline to make a grant to an applicant that carried out a project that involved the fraudulent use of funds under section 402A(c)(2)(B) of the HEA.
The Secretary uses the following criteria to evaluate an application for a new grant:
(a)
(1) A high number or percentage, or both, of low-income families residing in the target area;
(2) A high number or percentage, or both, of individuals residing in the target area with education completion levels below the baccalaureate level;
(3) A high need on the part of residents of the target area for further education and training from programs
(4) Other indicators of need for an Educational Opportunity Centers project, including the presence of unaddressed educational or socioeconomic problems of adult residents in the target area.
(b)
(1) Include both process and outcome objectives relating to each of the purposes of the Educational Opportunity Centers program stated in § 644.1;
(2) Address the needs of the target area;
(3) Are clearly described, specific, and measurable; and
(4) Are ambitious but attainable within each budget period and the project period given the project budget and other resources.
(c)
(1) (4 points) The plan to inform the residents, schools, and community organizations in the target area of the goals, objectives, and services of the project and the eligibility requirements for participation in the project;
(2) (4 points) The plan to identify and select eligible participants and ensure their participation without regard to race, color, national origin, gender, or disability;
(3) (2 points) The plan to assess each participant's need for services provided by the project;
(4) (12 points) The plan to provide services that meet participants’ needs and achieve the objectives of the project; and
(5) (8 points) The management plan to ensure the proper and efficient administration of the project including, but not limited to, the project's organizational structure, the time committed to the project by the project director and other personnel, and, where appropriate, its coordination with other projects for disadvantaged students.
(d)
(1) (8 points) Facilities, equipment, supplies, personnel, and other resources committed by the applicant; and
(2) (8 points) Resources secured through written commitments from schools, community organizations, and others.
(e)
(i) The qualifications required of the project director.
(ii) The qualifications required of each of the other personnel to be used in the project.
(iii) The plan to employ personnel who have succeeded in overcoming the disadvantages or circumstances like those of the population of the target area.
(2) In evaluating the qualifications of a person, the Secretary considers his or her experience and training in fields related to the objectives of the project.
(f)
(g)
(1) Are appropriate to the project's objectives;
(2) Provide for the applicant to determine, using specific and quantifiable measures, the success of the project in—
(i) Making progress toward achieving its objectives (a formative evaluation); and
(ii) Achieving its objectives at the end of the project period (a summative evaluation); and
(3) Provide for the disclosure of unanticipated project outcomes, using quantifiable measures if appropriate.
(a) In the case of an application described in § 644.20(a)(2)(i), the Secretary reviews information relating to an applicant's performance under its expiring Educational Opportunity Centers project. This information includes performance reports, audit reports, site visit reports, and project evaluation reports.
(b) The Secretary evaluates the applicant's prior experience in delivering services on the basis of the following criteria:
(1) (3 points) (i) Whether the applicant provided services to the required number of participants who resided in the target area; and
(ii) Whether two-thirds of all participants served were low-income individuals and potential first-generation college students.
(2) (6 points) The extent to which the applicant met or exceeded its objectives regarding the provision of assistance to individuals in applying for admission to, or financial aid for, programs of postsecondary education.
(3) (6 points) The extent to which the applicant met or exceeded its objectives regarding the admission or reentry of participants to programs of postsecondary education.
(a) The Secretary sets the amount of a grant on the basis of—
(1) 34 CFR 75.232 and 75.233, for new grants; and
(2) 34 CFR 75.253, for the second and subsequent years of a project period.
(b) If the circumstances described in section 402A(b)(3) of the HEA exist, the Secretary uses the available funds to set the amount of the grant beginning in fiscal year 1994 at the lesser of—
(1) $180,000; or
(2) The amount requested by the applicant.
The cost principles that apply to the Educational Opportunity Centers program are in 34 CFR part 74, subpart Q. Allowable costs include the following if they are reasonably related to the objectives of the project:
(a) Transportation, meals, and, with specific prior approval of the Secretary, lodging for participants and staff for—
(1) Visits to postsecondary educational institutions to obtain information relating to the admission of participants to those institutions;
(2) Participation in “College Day” activities; and
(3) Field trips to observe and meet with people who are employed in various career fields in the target area and who can serve as role models for participants.
(b) Purchase of testing materials.
(c) Fees required for college admissions of entrance examinations if—
(1) A waiver is unavailable; and
(2) The fee is paid by the grantee to a third party on behalf of a participant.
(d) In-service training of project staff.
(e) Rental of space if—
(1) Space is not available at the site of the grantee; and
(2) The rented space is not owned by the grantee.
(f) Purchase of computer hardware, computer software, or other equipment for student development, project administration, and recordkeeping, if the applicant demonstrates to the Secretary's satisfaction that the equipment is required to meet the objectives of the project more economically or efficiently.
Costs that are unallowable under the Educational Opportunity Centers program include, but are not limited to, the following:
(a) Tuition, fees, stipends, and other forms of direct financial support for participants.
(b) Research not directly related to the evaluation or improvement of the project.
(c) Construction, renovation, and remodeling of any facilities.
(a)
(2) A grantee shall determine the status of a low-income individual on the basis of the documentation described in section 402A(e) of the HEA.
(b)
(c)
(1) The basis for the grantee's determination that the participant is eligible to participate in the project under § 644.3;
(2) The services that are provided to the participant; and
(3) The specific educational benefits received by the participant.
(d)
(2) The grantee shall give the project director sufficient authority to administer the project effectively.
(3) The Secretary waives the requirement in paragraph (d) (1) of this section if the applicant demonstrates that the requirement will hinder coordination—
(i) Among the Federal TRIO Programs (sections 402A through 402F of the HEA); or
(ii) Between the programs funded under sections 402A through 410 of the HEA and similar programs funded through other sources.
20 U.S.C. 1070a-11 and 1070a-13, unless otherwise noted.
(a) The Upward Bound Program provides Federal grants to projects designed to generate in program participants the skills and motivation necessary to complete a program of secondary education and to enter and succeed in a program of postsecondary education.
(b) The Upward Bound Program provides Federal grants for the following three types of projects:
(1) Regular Upward Bound projects.
(2) Upward Bound Math and Science Centers.
(3) Veterans Upward Bound projects.
The following entities are eligible to apply for a grant to carry out an Upward Bound project:
(a) Institutions of higher education.
(b) Public or private agencies or organizations.
(c) Secondary schools, in exceptional cases, if there are no other applicants capable of providing this program in the target area or areas to be served by the proposed project.
(d) A combination of the types of institutions, agencies, and organizations described in paragraphs (a) and (b) of this section.
An individual is eligible to participate in a Regular, Veterans, or a Math and Science Upward Bound project if the individual meets all of the following requirements:
(a)(1) Is a citizen or national of the United States.
(2) Is a permanent resident of the United States.
(3) Is in the United States for other than a temporary purpose and provides evidence from the Immigration and Naturalization Service of his or her intent to become a permanent resident.
(4) Is a permanent resident of Guam, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands.
(5) Is a resident of the Freely Associated States—the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau.
(b) Is—
(1) A potential first-generation college student; or
(2) A low-income individual.
(c) Has a need for academic support, as determined by the grantee, in order to pursue successfully a program of education beyond high school.
(d) At the time of initial selection, has completed the eighth grade but has not entered the twelfth grade and is at least 13 years old but not older than 19, although the Secretary may waive the age requirement if the applicant demonstrates that the limitation would defeat the purposes of the Upward Bound program. However, a veteran as defined in § 645.6, regardless of age, is eligible to participate in an Upward Bound project if he or she satisfies the eligibility requirements in paragraphs (a), (b), and (c) of this section.
(a) At least two-thirds of the eligible participants a grantee serves must at the time of initial selection qualify as both low-income individuals and potential first-generation college students. The remaining participants must at the time of initial selection qualify as either low-income individuals or potential first generation college students.
(b) For purposes of documenting a participant's low-income status the following applies:
(1) In the case of a student who is not an independent student, an institution shall document that the student is a
(i) A signed statement from the student's parent or legal guardian regarding family income;
(ii) Verification of family income from another governmental source;
(iii) A signed financial aid application; or
(iv) A signed United States or Puerto Rican income tax return.
(2) In the case of a student who is an independent student, an institution shall document that the student is a low-income individual by obtaining and maintaining—
(i) A signed statement from the student regarding family income;
(ii) Verification of family income from another governmental source;
(iii) A signed financial aid application; or
(iv) A signed United States or Puerto Rican income tax return.
(c) For purposes of documenting potential first generation college student status, documentation consists of a signed statement from a dependent participant's parent, or a signed statement from an independent participant.
(d) A grantee does not have to revalidate a participant's eligibility after the participant's initial selection.
The following regulations apply to the Upward Bound Program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations);
(2) 34 CFR part 75 (Direct Grant Programs), except for § 75.511;
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations), except for the definition of “secondary school” in 34 CFR 77.1;
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities);
(5) 34 CFR part 82 (New Restrictions on Lobbying);
(6) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants));
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 645.
(a)
(b)
(1) With regard to a dependent student, the taxable income of the individual's parents;
(2) With regard to a dependent student who is an orphan or ward of the court, no taxable income;
(3) With regard to an independent student, the taxable income of the student and his or her spouse.
(1) Is an orphan or ward of the court;
(2) Is a veteran of the Armed Forces of the United States (as defined in this section);
(3) Is a married individual; or
(4) Has legal dependents other than a spouse.
(1) Is determined to be eligible to participate in the project under § 645.3;
(2) Resides in the target area, or is enrolled in a target school at the time of acceptance into the project; and
(3) Has been determined by the project director to be committed to the project, as evidenced by being allowed to continue in the project for at least—
(i) Ten days in a summer component if the individual first enrolled in an Upward Bound project's summer component; or
(ii) Sixty days if the individual first enrolled in an Upward Bound project's academic year component.
(1) An individual neither of whose natural or adoptive parents received a baccalaureate degree; or
(2) A student who, prior to the age of 18, regularly resided with and received support from only one natural or adoptive parent and whose supporting parent did not receive a baccalaureate degree.
(1) For a period of more than 180 days, any part of which occurred after January 31, 1955, and who was discharged or released from active duty under conditions other than dishonorable; or
(2) After January 31, 1955, and who was discharged or released from active duty because of a service-connected disability.
The Secretary provides grants to the following three types of Upward Bound projects:
(a) Regular Upward Bound projects designed to prepare high school students for programs of postsecondary education.
(b) Upward Bound Math and Science Centers designed to prepare high school students for postsecondary education programs that lead to careers in the fields of math and science.
(c) Veterans Upward Bound projects designed to assist veterans to prepare for a program of postsecondary education.
(a) An Upward Bound project that has received funds under this part for at least two years shall include as part of its core curriculum, instruction in—
(1) Mathematics through pre-calculus;
(2) Laboratory science;
(3) Foreign language;
(4) Composition; and
(5) Literature.
(b) All Upward Bound projects may provide such services as—
(1) Instruction in subjects other than those listed in § 645.11(a) that are necessary for success in education beyond high school;
(2) Personal counseling;
(3) Academic advice and assistance in secondary school course selection;
(4) Tutorial services;
(5) Exposure to cultural events, academic programs, and other educational activities not usually available to disadvantaged youths;
(6) Activities designed to acquaint youths participating in the project with the range of career options available to them;
(7) Instruction designed to prepare youths participating in the project for careers in which persons from disadvantaged backgrounds are particularly underrepresented;
(8) Mentoring programs involving elementary or secondary school teachers, faculty members at institutions of higher education, students, or any combination of these persons and other professional individuals; and
(9) Programs and activities such as those described in paragraphs (b)(1) through (b)(8) of this section that are specifically designed for individuals with limited proficiency in English.
(a) Regular Upward Bound projects—
(1) Must provide participants with a summer instructional component that is designed to simulate a college-going experience for participants, and an academic year component; and
(2) May provide a summer bridge component to those Upward Bound participants who have graduated from secondary school and intend to enroll in an institution of higher education in the following fall term. A summer bridge component provides participants with services and activities, including college courses, that aid in the transition from secondary education to postsecondary education.
(b) A summer instructional component shall—
(1) Be six weeks in length unless the grantee can demonstrate to the Secretary that a shorter period will not hinder the effectiveness of the project nor prevent the project from achieving its goals and objectives, and the Secretary approves that shorter period; and
(2) Provide participants with one or more of the services described in § 645.11 at least five days per week.
(c)(1) Except as provided in paragraph (c)(2) of this section, an academic year component shall provide program participants with one or more of the services described in § 645.11 on a weekly basis throughout the academic year and, to the extent possible, shall not prevent participants from fully participating in academic and nonacademic activities at the participants’ secondary school.
(2) If an Upward Bound project's location or the project's staff are not readily accessible to participants because of distance or lack of transportation, the grantee may, with the Secretary's permission, provide project services to participants every two weeks during the academic year.
(a) In addition to the services that must be provided under § 645.11(a) and may be provided under § 645.11(b), an Upward Bound Math and Science Center must provide—
(1) Intensive instruction in mathematics and science, including hands-on experience in laboratories, in computer facilities, and at field-sites;
(2) Activities that will provide participants with opportunities to learn from mathematicians and scientists who are engaged in research and teaching at the applicant institution, or who are engaged in research or applied science at hospitals, governmental laboratories, or other public and private agencies;
(3) Activities that will involve participants with graduate and undergraduate science and mathematics majors who may serve as tutors and counselors for participants; and
(4) A summer instructional component that is designed to simulate a college-going experience that is at least six weeks in length and includes daily coursework and other activities as described in this section as well as in § 645.11.
(b) Math Science Upward Bound Centers may also include—
(1) A summer bridge component consisting of math and science related
(2) An academic year component designed by the applicant to enhance achievement of project objectives in the most cost-effective way taking into account the distances involved in reaching participants in the project's target area.
In addition to the services that must be provided under § 645.11(a) and may be provided under § 645.11(b), a Veterans Upward Bound project must—
(a) Provide intensive basic skills development in those academic subjects required for successful completion of a high school equivalency program and for admission to postsecondary education programs;
(b) Provide short-term remedial or refresher courses for veterans who are high school graduates but who have delayed pursuing postsecondary education. If the grantee is an institution of higher education, these courses shall not duplicate courses otherwise available to veterans at the institution; and
(c) Assist veterans in securing support services from other locally available resources such as the Veterans Administration, State veterans agencies, veterans associations, and other State and local agencies that serve veterans.
(a) The Secretary accepts more than one application from an eligible entity so long as an additional application describes a project that serves a different participant population.
(b) Each application for funding under the Upward Bound Program shall state whether the application proposes a Regular Upward Bound project, an Upward Bound Math and Science Center, or a Veterans Upward Bound project.
An applicant must assure the Secretary that—
(a) Not less than two-thirds of the project's participants will be low-income individuals who are potential first generation college students; and
(b) That the remaining participants be either low-income individuals or potential first generation college students.
(a) The Secretary evaluates an application for a grant as follows:
(1)(i) The Secretary evaluates the application on the basis of the selection criteria in § 645.31.
(ii) The maximum score for all the criteria in § 645.31 is 100 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(2)(i) If an applicant for a new grant proposes to continue to serve substantially the same target population or schools that the applicant is serving under an expiring project, the Secretary evaluates the applicant's prior experience in delivering services under the expiring Upward Bound project on the basis of the criteria in § 645.32.
(ii) The maximum score for all the criteria in § 645.32 is 15 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(b) The Secretary makes grants in rank order on the basis of the application's total scores under paragraphs (a)(1) and (a)(2) of this section.
(c) If the total scores of two or more applications are the same and there are insufficient funds for these applications after the approval of higher-
(d) The Secretary may decline to make a grant to an applicant that carried out a project that involved the fraudulent use of funds under section 402A(c)(2)(B) of the HEA.
The Secretary uses the following criteria to evaluate an application for a grant:
(a)
(1) The Secretary evaluates the need for a Regular Upward Bound project in the proposed target area on the basis of information contained in the application which clearly demonstrates that—
(i) The income level of families in the target area is low;
(ii) The education attainment level of adults in the target area is low;
(iii) Target high school dropout rates are high;
(iv) College-going rates in target high schools are low;
(v) Student/counselor ratios in the target high schools are high; and
(vi) Unaddressed academic, social and economic conditions in the target area pose serious problems for low-income, potentially first-generation college students.
(2) The Secretary evaluates the need for an Upward Bound Math and Science Center in the proposed target area on the basis of—
(i) The extent to which student performance on standardized achievement and assessment tests in mathematics and science in the target area is lower than State or national norms.
(ii) The extent to which potential participants attend schools in the target area that lack the resources and coursework that would help prepare persons for entry into postsecondary programs in mathematics, science, or engineering;
(iii) The extent to which such indicators as attendance data, dropout rates, college-going rates and student/counselor ratios in the target area indicate the importance of having additional educational opportunities available to low-income, first-generation students; and
(iv) The extent to which there are eligible students in the target area who have demonstrated interest and capacity to pursue academic programs and careers in mathematics and science, and who could benefit from an Upward Bound Math and Science program.
(3) The Secretary evaluates the need for a Veterans Upward Bound project in the proposed target area on the basis of clear evidence that shows—
(i) The proposed target area lacks the services for eligible veterans that the applicant proposes to provide;
(ii) A large number of veterans who reside in the target area are low income and potential first generation college students;
(iii) A large number of veterans who reside in the target area who have not completed high school or, have completed high school but have not enrolled in a program of postsecondary education; and
(iv) Other indicators of need for a Veterans Upward Bound project, including the presence of unaddressed academic or socio-economic problems of veterans in the area.
(b)
(1) Include both process and outcome objectives relating to the purpose of the applicable Upward Bound programs for which they are applying;
(2) Address the needs of the target area or target population; and
(3) Are measurable, ambitious, and attainable over the life of the project.
(c)
(1) The plan to inform the faculty and staff at the applicant institution
(2) The plan for identifying, recruiting, and selecting participants to be served by the project;
(3) The plan for assessing individual participant needs and for monitoring the academic progress of participants while they are in Upward Bound;
(4) The plan for locating the project within the applicant's organizational structure;
(5) The curriculum, services and activities that are planned for participants in both the academic year and summer components;
(6) The planned timelines for accomplishing critical elements of the project;
(7) The plan to ensure effective and efficient administration of the project, including, but not limited to, financial management, student records management, and personnel management;
(8) The applicant's plan to use its resources and personnel to achieve project objectives and to coordinate the Upward Bound project with other projects for disadvantaged students;
(9) The plan to work cooperatively with parents and key administrative, teaching, and counseling personnel at the target schools to achieve project objectives; and
(10) A follow-up plan for tracking graduates of Upward Bound as they enter and continue in postsecondary education.
(d)
(1) The applicant is committed to supplementing the project with resources that enhance the project such as: space, furniture and equipment, supplies, and the time and effort of personnel other than those employed in the project.
(2) The applicant has secured written commitments of support from schools, community organizations, and businesses, including the commitment of resources that will enhance the project as described in paragraph (d)(1) of this section.
(e)
(1) The qualifications required of the project director, including formal training or work experience in fields related to the objectives of the project and experience in designing, managing, or implementing similar projects;
(2) The qualifications required of each of the other personnel to be used in the project, including formal training or work experience in fields related to the objectives of the project;
(3) The quality of the applicant's plan for employing personnel who have succeeded in overcoming barriers similar to those confronting the project's target population.
(f)
(1) The budget for the project is adequate to support planned project services and activities; and
(2) Costs are reasonable in relation to the objectives and scope of the project.
(g)
(1) Are appropriate to the project and include both quantitative and qualitative evaluation measures; and
(2) Examine in specific and measurable ways the success of the project in making progress toward achieving its process and outcomes objectives.
(a) In the case of an application described in § 645.30(a)(2), the Secretary reviews information relating to an applicant's performance under its expiring Upward Bound grant. This information includes information derived from annual performance reports, audit reports, site visit reports, project evaluation reports, and any other verifiable information submitted by the applicant.
(b) The Secretary evaluates the applicant's prior experience in delivering services on the basis of the following criteria:
(1) (3 points) Whether the applicant serves the number of participants agreed to under the approved application;
(2) (3 points) The extent to which project participants have demonstrated improvement in academic skills and competencies as measured by standardized achievement tests and grade point averages;
(3) (3 points) The extent to which project participants continue to participate in the Upward Bound Program until they complete their secondary education program;
(4) The extent to which participants who complete the project, or were scheduled to complete the project, undertake programs of postsecondary education; and
(5) (3 points) The extent to which participants who complete the project, or were scheduled to complete the project, succeed in education beyond high school, including the extent to which they graduate from postsecondary education programs.
(a) The Secretary sets the amount of a grant on the basis of—
(1) 34 CFR 75.232 and 75.233, for new grants; and
(2) 34 CFR 75.253, for the second and subsequent years of a project period.
(b) If the circumstances described in section 402A(b)(3) of the HEA exist, the Secretary uses the available funds to set the amount of the grant at the lesser of—
(1) $190,000; or
(2) The amount requested by the applicant.
(a) Except as provided in paragraph (b) of this section, a project period under the Upward Bound Program is four years.
(b) The Secretary approves a project period of five years for applicants that score in the highest ten percent of all applicants approved for new grants under the criteria in § 645.31.
The cost principles that apply to the Upward Bound Program are in 34 CFR part 74, subpart Q. Allowable costs include the following if they are reasonably related to the objectives of the project:
(a) In-service training of project staff.
(b) Rental of space if space is not available at the host institution and the space rented is not owned by the host institution.
(c) For participants in an Upward Bound residential summer component, room and board—computed on a weekly basis—not to exceed the weekly rate the host institution charges regularly enrolled students at the institution.
(d) Room and board for those persons responsible for dormitory supervision of participants during a residential summer component.
(e) Educational pamphlets and similar materials for distribution at workshops for the parents of participants.
(f) Student activity fees for Upward Bound participants.
(g) Admissions fees, transportation, Upward Bound T-shirts, and other costs necessary to participate in field trips, attend educational activities, visit museums, and attend other events that have as their purpose the intellectual, social, and cultural development of participants.
(h) Costs for one project-sponsored banquet or ceremony.
(i) Tuition costs for postsecondary credit courses at the host institution for participants in the summer bridge component.
(j)(1) Accident insurance to cover any injuries to a project participant while participating in a project activity; and
(2) Medical insurance and health service fees for the project participants
(k) Courses in English language instruction for project participants with limited proficiency in English and for whom English language proficiency is necessary to succeed in postsecondary education.
(l) Transportation costs of participants for regularly scheduled project activities.
(m) Transportation, meals, and overnight accommodations for staff members when they are required to accompany participants in project activities such as field trips.
(n) Purchase of computer hardware, computer software, or other equipment for student development, project administration and recordkeeping, if the applicant demonstrates to the Secretary's satisfaction that the equipment is required to meet the objectives of the project more economically or efficiently.
(o) Fees required for college admissions applications or entrance examinations if—
(1) A waiver of the fee is unavailable;
(2) The fee is paid by the grantee to a third party on behalf of a participant.
Costs that may not be charged against a grant under this program include the following:
(a) Research not directly related to the evaluation or improvement of the project.
(b) Meals for staff except as provided in § 645.40 (d) and (m) and in paragraph (c) of this section.
(c) Room and board for administrative and instructional staff personnel who do not have responsibility for dormitory supervision of project participants during a residential summer component unless these costs are approved by the Secretary.
(d) Room and board for participants in Veterans Upward Bound projects.
(e) Construction, renovation or remodeling of any facilities.
(f) Tuition, stipends, or any other form of student financial aid for project staff beyond that provided to employees of the grantee as part of its regular fringe benefit package.
(a) An Upward Bound project may provide stipends for all participants who participate on a full-time basis.
(b) In order to receive the stipend, the participant must show evidence of satisfactory participation in activities of the project including—
(1) Regular attendance; and
(2) Performance in accordance with standards established by the grantee and described in the application.
(c) The grantee may prorate the amount of the stipend according to the number of scheduled sessions in which the student participated.
(d) The following rules govern the amounts of stipends a grantee is permitted to provide:
(1) For Regular Upward Bound projects and Upward Bound Math and Science Centers—
(i) For the academic year component, the stipend may not exceed $40 per month; and
(ii) For the summer component, the stipend may not exceed $60 per month.
(2) For Veterans Upward Bound projects, the stipend may not exceed $40 per month.
(a)
(2) Veterans Upward Bound projects shall serve a minimum of 120 veterans in each budget period.
(3) The Secretary may waive the requirements of paragraphs (a)(1) and (a)(2) of this section if the applicant can demonstrate that the project will be more cost effective and consistent with the objectives of the program if a greater or lesser number of participants will be served.
(b)
(2) The grantee shall give the project director sufficient authority to administer the project effectively.
(3) The Secretary waives the requirement in paragraph (b)(1) of this section if the applicant demonstrates that the requirement will hinder coordination—
(i) Among the Federal TRIO Programs; or
(ii) Between the programs funded under sections 402A through 410 of the HEA and similar programs funded through other sources.
(c)
(1) The basis for the grantee's determination that the participant is eligible to participate in the project under § 645.3;
(2) The basis for the grantee's determination that the participant has a need for academic support in order to pursue successfully a program of education beyond secondary school;
(3) The services that are provided to the participant;
(4) The educational progress of the participant during high school and, to the degree possible, during the participant's pursuit of a postsecondary education program.
20 U.S.C. 1070a-11 and 1070a-14, unless otherwise noted.
The Student Support Services Program provides grants for projects designed to—
(a) Increase the retention and graduation rates of eligible students;
(b) Increase the transfer rate of eligible students from two-year to four-year institutions; and
(c) Foster an institutional climate supportive of the success of low-income and first generation college students and individuals with disabilities through services such as those described in § 646.4.
An institution of higher education or a combination of institutions of higher education is eligible to receive a grant to carry out a Student Support Services project.
A student is eligible to participate in a Student Support Services project if
(a) Is a citizen or national of the United States or meets the residency requirements for Federal student financial assistance.
(b) Is enrolled at the grantee institution or accepted for enrollment in the next academic term at that institution.
(c) Has a need for academic support, as determined by the grantee, in order to pursue successfully a postsecondary educational program.
(d) Is—
(1) A low-income individual;
(2) A first generation college student; or
(3) An individual with disabilities.
A Student Support Services project may provide services such as:
(a) Instruction in reading, writing, study skills, mathematics, and other subjects necessary for success beyond secondary school.
(b) Personal counseling.
(c) Academic advice and assistance in course selection.
(d) Tutorial services and counseling and peer counseling.
(e) Exposure to cultural events and academic programs not usually available to disadvantaged students.
(f) Activities designed to acquaint students participating in the project with the range of career options available.
(g) Activities designed to secure admission and financial assistance for enrollment in graduate and professional programs.
(h) Activities designed to assist students currently enrolled in two-year institutions in securing admission and financial assistance for enrollment in a four-year program of postsecondary education.
(i) Mentoring programs involving faculty or upper class students, or any combination of faculty members and upper class students.
(j) Programs and activities as described in paragraphs (a) through (i) of this section that are specifically designed for students of limited English proficiency.
(k) Other activities designed to meet the purposes of the Student Support Services Program stated in § 646.1.
(a) Except as provided in paragraph (b) of this section, a project period under the Student Support Services Program is four years.
(b) The Secretary approves a project period of five years for applicants that score in the highest ten percent of all applicants approved for new grants under the criteria in § 646.21.
The following regulations apply to the Student Support Services Program:
(a) The Education Department General Administrative Regulations (EDGAR) in 34 CFR parts 74, 75, 77, 79, 82, 85 and 86.
(b) The regulations in this part 646.
(a)
(b)
(c)
(1) Is permanent in nature;
(2) Offers courses in educational programs leading to a degree, certificate, or other recognized educational credential;
(3) Has its own faculty and administrative or supervisory organization; and
(4) Has its own budgetary and hiring authority.
(1) Low-income, first-generation college students; or
(2) Disabled students.
(1) Is determined to be eligible to participate in the project under § 646.3; and
(2) Receives project services that the grantee has determined to be sufficient to increase the individual's chances for success in a postsecondary educational program.
The Secretary accepts more than one application from an eligible applicant so long as each additional application describes a project that serves a different campus, or a different population of participants who cannot readily be served by a single project.
An applicant shall assure in its application that—
(a) At least two-thirds of the students it will serve in its Student Support Services project will be—
(1) Low-income individuals who are first generation college students; or
(2) Individuals with disabilities;
(b) The remaining students it will serve will be low-income individuals, first generation college students, or individuals with disabilities;
(c) Not less than one-third of the individuals with disabilities will be low— income individuals; and
(d) Each student participating in the project will be offered sufficient financial assistance to meet that student's full financial need.
(a) The Secretary evaluates an application for a new grant as follows:
(1)(i) The Secretary evaluates the application on the basis of the selection criteria in § 646.21.
(ii) The maximum score for all the criteria in § 646.21 is 100 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(2)(i) If an application for a new grant proposes to continue to serve substantially the same population or campus that the applicant is serving under an expiring grant, the Secretary evaluates the applicant's prior experience in delivering services under the expiring grant on the basis of the criteria in § 646.22.
(ii) The maximum score for all the criteria in § 646.22 is 15 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(b) The Secretary makes new grants in rank order on the basis of the applications’ total scores under paragraphs (a)(1) and (a)(2) of this section.
(c) If the total scores of two or more applications are the same and there is insufficient money available to fully fund them both after funding the higher-ranked applications, the Secretary chooses among the tied applications so as to serve geographic areas that have been underserved by the Student Support Services Program.
(d) The Secretary does not make grants to applicants that carried out a Federal TRIO program project that involved the fraudulent use of funds.
The Secretary uses the following criteria to evaluate an application for a new grant:
(a)
(1) (8 points) A high number or percentage, or both, of students enrolled or accepted for enrollment at the applicant institution who meet the eligibility requirements of § 646.3;
(2) (8 points) The academic and other problems that eligible students encounter at the applicant institution; and
(3) (8 points) The differences between eligible Student Support Services students compared to an appropriate group, based on the following indicators:
(i) Retention and graduation rates.
(ii) Grade point averages.
(iii) Graduate and professional school enrollment rates (four-year colleges only).
(iv) Transfer rates from two-year to four-year institutions (two-year colleges only).
(b)
(1) (2 points) Include performance, process and outcome objectives relating to each of the purposes of the Student Support Services Program stated in § 646.1;
(2) (2 points) Address the identified needs of the proposed participants;
(3) (2 points) Are clearly described, specific, and measurable; and
(4) (2 points) Are ambitious but attainable within each budget period and the project period given the project budget and other resources.
(c)
(1) (3 points) The plan to inform the institutional community (students, faculty, and staff) of the goals, objectives, and services of the project and the eligibility requirements for participation in the project.
(2) (3 points) The plan to identify, select, and retain project participants with academic need.
(3) (4 points) The plan for assessing each individual participant's need for specific services and monitoring his or her academic progress at the institution to ensure satisfactory academic progress.
(4) (10 points) The plan to provide services that address the goals and objectives of the project.
(5) (10 points) The applicant's plan to ensure proper and efficient administration of the project, including the organizational placement of the project; the time commitment of key project staff; the specific plans for financial management, student records management, and personnel management; and, where appropriate, its plan for coordination with other programs for disadvantaged students.
(d)
(1) (6 points) Committed facilities, equipment, supplies, personnel, and other resources to supplement the grant and enhance project services;
(2) (6 points) Established administrative and academic policies that enhance participants’ retention at the institution and improve their chances of graduating from the institution;
(3) (2 points) Demonstrated a commitment to minimize the dependence on student loans in developing financial aid packages for project participants by committing institutional resources to the extent possible; and
(4) (2 points) Assured the full cooperation and support of the Admissions, Student Aid, Registrar and data collection and analysis components of the institution.
(e)
(1) (3 points) The qualifications required of the project director, including formal education and training in fields related to the objectives of the project, and experience in designing, managing, or implementing Student Support Services or similar projects;
(2) (3 points) The qualifications required of other personnel to be used in the project, including formal education, training, and work experience in fields related to the objectives of the project; and
(3) (3 points) The quality of the applicant's plan for employing personnel who have succeeded in overcoming barriers similar to those confronting the project's target population.
(f)
(g)
(1) The applicant's methods for evaluation—
(i) (2 points) Are appropriate to the project and include both quantitative and qualitative evaluation measures; and
(ii) (2 points) Examine in specific and measurable ways, using appropriate baseline data, the success of the project in improving academic achievement, retention and graduation of project participants; and
(2) (4 points) The applicant intends to use the results of an evaluation to make programmatic changes based upon the results of project evaluation.
(a) In the case of an application described in § 646.20(a)(2)(i), the Secretary reviews information relating to an applicant's performance under its expiring Student Support Services project. This information may come from performance reports, site visit reports, project evaluation reports, and any other verifiable information submitted by the applicant.
(b) The Secretary evaluates the applicant's prior experience in achieving the goals of the Student Support Services Program on the basis of the following criteria:
(1) (4 points) The extent to which project participants persisted toward completion of the academic programs in which they were enrolled.
(2) (4 points) The extent to which project participants met academic performance levels required to stay in good academic standing at the grantee institution.
(3) (4 points) (i) For four-year institutions, the extent to which project participants graduated; and
(ii) For two-year institutions, the extent to which project participants either graduated or transferred to four-year institutions.
(4) (3 points) The extent to which the applicant has met the administrative requirements—including recordkeeping, reporting, and financial accountability—under the terms of the previously funded award.
(a) The Secretary sets the amount of a grant on the basis of—
(1) 34 CFR 75.232 and 75.233, for new grants; and
(2) 34 CFR 75.253, for the second and subsequent years of a project period.
(b) If the circumstances described in section 402A(b)(3) of the HEA exist, the Secretary uses the available funds to set the amount of the grant at the lesser of—
(1) $170,000; or
(2) The amount requested by the applicant.
The cost principles that apply to the Student Support Services Program are in 34 CFR part 74, subpart Q. Allowable costs include the following if they are reasonably related to the objectives of the project:
(a) Cost of remedial and special classes if—
(1) These classes are not otherwise available at the grantee institution;
(2) Are limited to eligible project participants; and
(3) Project participants are not charged tuition for classes paid for by the project.
(b) Courses in English language instruction for students of limited English proficiency if these classes are limited to eligible project participants and not otherwise available at the grantee institution.
(c) In-service training of project staff.
(d) Activities of an academic or cultural nature, such as field trips, special lectures, and symposiums, that have as their purpose the improvement of the participants’ academic progress and personal development.
(e) Transportation of participants and staff to and from approved educational and cultural activities sponsored by the project.
(f) Purchase of computer hardware, computer software, or other equipment to be used for student development, student records and project administration if the applicant demonstrates to the Secretary's satisfaction that the equipment is required to meet the objectives of the project more economically or efficiently.
(g) Professional development travel for staff if directly related to the project's overall purpose and activities, except that these costs may not exceed four percent of total project salaries. The Secretary may adjust this percentage if the applicant demonstrates to the Secretary's satisfaction that a higher percentage is necessary and reasonable.
(h) Project evaluation that is directly related to assessing the project's impact on student achievement and improving the delivery of services.
Costs that may not be charged against a grant under the Student Support Services Program include, but are not limited to, the following:
(a) Costs involved in recruiting students for enrollment at the institution.
(b) Tuition, fees, stipends, and other forms of direct financial support for staff or participants.
(c) Research not directly related to the evaluation or improvement of the project.
(d) Construction, renovation, or remodeling of any facilities.
(a)
(2) A grantee shall determine the low-income status of an individual on the basis of the documentation described in section 402A(e) of the Higher Education Act.
(3) A grantee may not serve any individual who is receiving the same services from another Federal TRIO program.
(b)
(1) The basis for the grantee's determination that each participant is eligible to participate in the project under § 646.3;
(2) The grantee's basis for determining the academic need for each participant;
(3) The services that are provided to each participant; and
(4) The performance and progress of each participant by cohort for the duration of the participant's attendance at the grantee institution.
(c)
(2) The grantee shall give the project director sufficient authority to administer the project effectively.
(3) The Secretary waives the requirement in paragraph (c)(1) of this section if the applicant demonstrates that the requirement will hinder coordination—
(i) Among the Federal TRIO programs; or
(ii) Between the programs funded under sections 404A through 410 of the Higher Education Act and similar programs funded through other sources.
(d)
(2) To the extent practical, the grantee may share staff with programs serving similar populations provided the grantee maintains appropriate records of staff time and effort and does not commingle grant funds.
(3) Costs for special classes and events that would benefit Student Support Services students and participants in other programs for disadvantaged students must be proportionately divided among the benefiting projects.
20 U.S.C. 1070a-11 and 1070a-15, unless otherwise noted.
The Ronald E. McNair Postbaccalaureate Achievement Program—referred to in these regulations as the McNair program—awards grants to institutions of higher education for projects designed to provide disadvantaged college students with effective preparation for doctoral study.
Institutions of higher education and combinations of those institutions are eligible for grants to carry out McNair projects.
A student is eligible to participate in a McNair project if the student meets all the following requirements:
(a)(1) Is a citizen or national of the United States; or
(2) Is a permanent resident of the United States; or
(3) Is in the United States for other than a temporary purpose and provides evidence from the Immigration and Naturalization Service of his or her intent to become a permanent resident; or
(4) Is a permanent resident of Guam, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands; or
(5) Is a resident of one of the Freely Associated States.
(b) Is currently enrolled in a degree program at an institution of higher education that participates in the student financial assistance programs authorized under Title IV of the HEA.
(c) Is—
(1) A low-income individual who is a first-generation college student;
(2) A member of a group that is underrepresented in graduate education; or
(3) A member of a group that is not listed in § 647.7 if the group is underrepresented in certain academic disciplines as documented by standard statistical references or other national survey data submitted to and accepted by the Secretary on a case-by-case basis.
(d) Has not enrolled in doctoral level study at an institution of higher education.
A McNair project may provide the following services and activities:
(a) Opportunities for research or other scholarly activities at the grantee institution or at graduate centers that are designed to provide participants with effective preparation for doctoral study.
(b) Summer internships.
(c) Seminars and other educational activities designed to prepare participants for doctoral study.
(d) Tutoring.
(e) Academic counseling.
(f) Assistance to participants in securing admission to and financial assistance for enrollment in graduate programs.
(g) Mentoring programs involving faculty members or students at institutions of higher education, or any combination of faculty members and students.
(h) Exposure to cultural events and academic programs not usually available to project participants.
(a) Except as provided in paragraph (b) of this section, a project period under the McNair program is four years.
(b) The Secretary approves a project period of five years for applications that score in the highest ten percent of all applications approved for new grants under the criteria in § 647.21.
The following regulations apply to the McNair program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 85 ((Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 647.
(a)
(b)
(1) A student neither of whose natural or adoptive parents received a baccalaureate degree; or
(2) A student who, prior to the age of 18, regularly resided with and received support from only one parent, and whose supporting parent did not receive a baccalaureate degree.
(3) An individual who, prior to the age of 18, did not regularly reside with or receive support from a natural or an adoptive parent.
(1) Provides instruction in one or more programs leading to a doctoral degree;
(2) Maintains specialized library collections;
(3) Employs scholars engaged in research that relates to the subject areas of the center; and
(4) Provides outreach and consultative services on a national, regional or local basis.
An applicant must submit as part of its application, assurances that—
(a) Each participant enrolled in the project will be enrolled in a degree program at an institution of higher education that participates in one or more of the student financial assistance programs authorized under Title IV of the HEA;
(b) Each participant given a summer research internship will have completed his or her sophomore year of study; and
(c)(1) At least two thirds of the students to be served will be low-income individuals who are first-generation college students; and
(2) The remaining students to be served will be members of groups underrepresented in graduate education.
(a) The Secretary evaluates an application for a new grant as follows:
(1)(i) The Secretary evaluates an application on the basis of the selection criteria in § 647.21.
(ii) The maximum score for all the criteria in § 647.21 is 100 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(2)(i) For an application from an applicant who has carried out a McNair project in the fiscal year immediately preceding the fiscal year for which the applicant is applying, the Secretary evaluates the applicant's prior experience on the basis of the criteria in § 647.22.
(ii) The maximum score for all the criteria in § 647.22 is fifteen (15) points. The maximum score for each criterion is indicated in parentheses with the criterion.
(iii) If an applicant described in paragraph (a)(2)(i) of this section applies for more than one new grant in the same fiscal year, the Secretary applies the criteria in § 647.22 to a project that seeks to continue support for an existing McNair project on that campus.
(b) The Secretary makes new grants in rank order on the basis of the total scores received by applications under paragraphs (a)(1) through (a)(3) of this section.
(c)(1) If the total scores of two or more applications are the same and there are insufficient funds for these applications after the approval of higher-ranked applications, the Secretary uses the remaining funds to achieve an equitable geographic distribution of all new projects.
(2) In making an equitable geographic distribution of new projects, the Secretary considers only the locations of new projects.
(d) The Secretary may decline to make a grant to an applicant that carried out a Federal TRIO Program project that involved the fraudulent use of funds.
The Secretary uses the following criteria to evaluate an application for a new grant:
(a)
(b)
(1) Include both process and outcome objectives relating to the purpose of the McNair program stated in § 647.1;
(2) Address the needs of the target population; and
(3) Are measurable, ambitious, and attainable over the life of the project.
(c)
(1) (4 points) The plan for identifying, recruiting and selecting participants to be served by the project, including students enrolled in the Student Support Services program;
(2) (4 points) The plan for assessing individual participant needs and for monitoring the academic growth of participants during the period in which the student is a McNair participant;
(3) (5 points) The plan for providing high quality research and scholarly activities in which participants will be involved;
(4) (5 points) The plan for involving faculty members in the design of research activities in which students will be involved;
(5) (5 points) The plan for providing internships, seminars, and other educational activities designed to prepare undergraduate students for doctoral study;
(6) (5 points) The plan for providing individual or group services designed to enhance a student's successful entry into postbaccalaureate education;
(7) (3 points) The plan to inform the institutional community of the goals and objectives of the project;
(8) (8 points) The plan to ensure proper and efficient administration of the project, including, but not limited to matters such as financial management, student records management, personnel management, the organizational structure, and the plan for coordinating the McNair project with other programs for disadvantaged students; and
(9) (5 points) The follow-up plan that will be used to track the academic and career accomplishments of participants after they are no longer participating in the McNair project.
(d)
(1)(i) The job qualifications of the project director.
(ii) The job qualifications of each of the project's other key personnel.
(iii) The quality of the project's plan for employing highly qualified persons, including the procedures to be used to employ members of groups underrepresented in higher education, including Blacks, Hispanics, American Indians, Alaska Natives, Asian Americans and Pacific Islanders (including Native Hawaiians).
(2) In evaluating the qualifications of a person, the Secretary considers his or her experience and training in fields related to the objectives of the project.
(e)
(1) The applicant's proposed allocation of resources in the budget is clearly related to the objectives of the project;
(2) Project costs and resources, including facilities, equipment, and supplies, are reasonable in relation to the objectives and scope of the project; and
(3) The applicant's proposed commitment of institutional resources to the McNair participants, as for example, the commitment of time from institutional research faculty and the waiver of tuition and fees for McNair participants engaged in summer research projects.
(f)
(1) Are appropriate to the project's objectives;
(2) Provide for the applicant to determine, in specific and measurable ways, the success of the project in—
(i) Making progress toward achieving its objectives (a formative evaluation); and
(ii) Achieving its objectives at the end of the project period (a summative evaluation); and
(3) Provide for a description of other project outcomes, including the use of quantifiable measures, if appropriate.
(a) The Secretary reviews information relating to an applicant's performance as a grantee under its expiring McNair project. In addition to the application under review, this information may be derived from performance reports, audit reports, site visit reports, and project evaluation reports received by the Secretary during the project period about to be completed.
(b) The Secretary evaluates the applicant's performance as a grantee on the basis of the following criteria:
(1) (3 points) Whether the applicant consistently served the number and types of participants the project was funded to serve.
(2) (4 points) Whether the applicant was successful in providing the participants with research and scholarly activities and whether those activities had an impact on project participants.
(3) (8 points) The extent to which the applicant met or exceeded its funded objectives with regard to project participants as demonstrated by the number of participants who—
(i) Attained a baccalaureate degree;
(ii) Enrolled in a postbaccalaureate program; and
(iii) Attained a doctoral level degree.
(a) The Secretary sets the amount of a grant on the basis of—
(1) 34 CFR 75.232 and 75.233 for new grants; and
(2) 34 CFR 75.253 for the second and subsequent years of a project period.
(b) If the circumstances described in section 402A(b)(3) of the HEA exist, the Secretary uses the available funds to set the amount of the grant beginning in fiscal year 1995 at the lesser of—
(1) $190,000; or
(2) The amount requested by the applicant.
Allowable project costs, not specifically covered by 34 CFR part 74, may include the following costs reasonably related to carrying out a McNair project:
(a) Activities of an academic or scholarly nature, such as trips to institutions of higher education offering doctoral programs, and special lectures, symposia, and professional conferences, which have as their purpose the encouragement and preparation of project participants for doctoral studies.
(b) Stipends of up to $2,400 per year for students engaged in research internships, provided that the student has completed the sophomore year of study at an eligible institution before the internship begins.
(c) Necessary tuition, room and board, and transportation for students engaged in research internships during the summer.
(d) Purchase of computer hardware, computer software, or other equipment for student development, project administration, and recordkeeping, if the applicant demonstrates to the Secretary's satisfaction that the equipment is required to meet the objectives of the project more economically or efficiently.
Costs that may not be charged against a grant under this program include the following:
(a) Payment of tuition, stipends, test preparation and fees or any other form of student financial support to staff or participants not expressly allowed under § 647.30.
(b) Construction, renovation, and remodeling of any facilities.
(a)
(2) A grantee shall determine the status of a low-income individual on the basis of the documentation described in section 402A(e) of the HEA.
(b)
(1) The basis for the grantee's determination that the student is eligible to participate in the project under § 647.3;
(2) The individual needs assessment;
(3) The services provided to the participant; and
(4) The specific educational progress made by the student during and after participation in the project.
(c)
(d)
(1) Authority to conduct the project effectively; and
(2) Appropriate professional qualifications, experience and administrative skills to effectively fulfill the objectives of the project.
20 U.S.C. 1135-1135ee, unless otherwise noted.
The Graduate Assistance in Areas of National Need program provides fellowships through academic departments of institutions of higher education to assist graduate students of superior ability who demonstrate financial need.
(a) The Secretary awards grants to the following:
(1) Any academic department of an institution of higher education that provides a course of study that—
(i) Leads to a graduate degree in an area of national need; and
(ii) Has been in existence for at least four years at the time of an application for a grant under this part.
(2) An academic department of an institution of higher education that—
(i) Satisfies the requirements of paragraph (a)(1) of this section; and
(ii) Submits a joint application with one or more eligible nondegree-granting institutions that have formal arrangements for the support of doctoral dissertation research with one or more degree-granting institutions.
(b) A formal arrangement under paragraph (a)(2)(ii) of this section is a written agreement between a degree-granting institution and an eligible nondegree-granting institution whereby the degree-granting institution accepts students from the eligible nondegree-granting institution as doctoral degree candidates with the intention of awarding these students doctorates in an area of national need.
(c) The Secretary does not award a grant under this part for study at a school or department of divinity.
(a) The Secretary awards grants to institutions of higher education to fund fellowships in one or more areas of national need.
(b)(1) For the purposes of this part, the Secretary designates areas of national need from the academic areas listed in the appendix to this part or from the resulting inter-disciplines.
(2) The Secretary announces these areas of national need in a notice published in the
Each grant awarded by the Secretary consists of the following:
(a) The stipends paid by the Secretary through the institution of higher education to fellows. The stipend provides an allowance to a fellow for the fellow's (and his or her dependents’) subsistence and other expenses.
(b) The institutional payments paid by the Secretary to the institution of higher education to be applied against each fellow's tuition, fees, and the costs listed in § 648.62(b).
(a) The amount of a grant to an academic department may not be less than $100,000 and may not be more than $750,000 in a fiscal year.
(b) In any fiscal year, no academic department may receive more than $750,000 as an aggregate total of new and continuing grants.
The duration of a grant awarded under this part is a maximum of three annual budget periods during a three-year (36-month) project period.
An institution shall provide, from non-Federal funds, an institutional matching contribution equal to at least 25 percent of the amount of the grant received under this part, for the uses indicated in § 648.63.
The following regulations apply to this program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part.
(a)
(b)
(i) Directly administers or supervises post-baccalaureate instruction in a specific discipline; and
(ii) Has the authority to award academic course credit acceptable to meet degree requirements at an institution of higher education.
(i) Conducts post-baccalaureate academic programs of study but does not award doctoral degrees in an area of national need;
(ii) Is described in section 501(c)(3) of the Internal Revenue Code of 1986 and is exempt from tax under section 501(a) of the Code;
(iii) Is organized and operated substantially to conduct scientific and cultural research and graduate training programs;
(iv) Is not a private foundation;
(v) Has academic personnel for instruction and counseling who meet the standards of the institution of higher education in which the students are enrolled; and
(vi) Has necessary research resources not otherwise readily available in the institutions in which students are enrolled.
(i) The most current edition of the Department's
(ii) The National Research Council's
(iii) Other standard statistical references, as announced annually in the
(iv) As documented by national survey data submitted to and accepted by the Secretary on a case-by-case basis.
(a) To apply for a grant under this part, an institution of higher education shall submit an application that responds to the appropriate selection criteria in § 648.31.
(b) In addition, an application for a grant must—
(1) Describe the current academic program for which the grant is sought;
(2) Request a specific number of fellowships to be awarded on a full-time basis for the academic year covered under the grant in each academic field included in the application;
(3) Set forth policies and procedures to ensure that in making fellowship awards under this part the institution will seek talented students from traditionally underrepresented backgrounds;
(4) Set forth policies and procedures to assure that in making fellowship awards under this part the institution will make awards to individuals who satisfy the requirements of § 648.40;
(5) Set forth policies and procedures to ensure that Federal funds made available under this part for any fiscal year will be used to supplement and, to the extent practical, increase the funds that otherwise would be made available for the purposes of this part and, in no case, to supplant those funds;
(6) Provide assurances that the institution will provide the institutional matching contribution described in § 648.7;
(7) Provide assurances that, in the event that funds made available to the academic department under this part are insufficient to provide the assistance due a student under the commitment entered into between the academic department and the student, the academic department will, from any funds available to it, fulfill the commitment to the student;
(8) Provide that the institution will comply with the requirements in subpart F; and
(9) Provide assurances that the academic department will provide at least one year of supervised training in instruction to students receiving fellowships under this program.
(c) In any application period, an academic department may not submit more than one application for new awards.
(a) The Secretary evaluates an application on the basis of the criteria in § 648.31.
(b) The Secretary awards up to 100 points for these criteria.
(c) The maximum possible score for each criterion is indicated in parentheses.
The Secretary uses the following criteria to evaluate an application:
(a)
(1) The applicant's general and specific objectives for the project are realistic and measurable;
(2) The applicant's objectives for the project seek to sustain and enhance the capacity for teaching and research at the institution and at State, regional, or national levels;
(3) The applicant's objectives seek to institute policies and procedures to ensure the enrollment of talented graduate students from traditionally underrepresented backgrounds; and
(4) The applicant's objectives seek to institute policies and procedures to ensure that it will award fellowships to individuals who satisfy the requirements of § 648.40.
(b)
(1) How the applicant identified the problems that form the specific needs of the project;
(2) The specific problems to be resolved by successful realization of the goals and objectives of the project; and
(3) How increasing the number of fellowships will meet the specific and general objectives of the project.
(c)
(1) The course offerings and academic requirements for the graduate program;
(2) The qualifications of the faculty, including education, research interest,
(3) The focus and capacity for research; and
(4) Any other evidence the applicant deems appropriate to demonstrate the quality of its academic program.
(d)
(1) Provides each fellow with the required supervised training in instruction;
(2) Provides adequate instruction on effective teaching techniques;
(3) Provides extensive supervision of each fellow's teaching performance; and
(4) Provides adequate and appropriate evaluation of the fellow's teaching performance.
(e)
(1) How the applicant plans to identify, recruit, and retain students from traditionally underrepresented backgrounds in the academic program for which fellowships are sought;
(2) How the applicant plans to identify eligible students for fellowships;
(3) The past success of the academic department in enrolling talented graduate students from traditionally underrepresented backgrounds; and
(4) The past success of the academic department in enrolling talented graduate students for its academic program.
(f)
(1) How the applicant will select fellows, including how the applicant will ensure that project participants who are otherwise eligible to participate are selected without regard to race, color, national origin, religion, gender, age, or disabling condition;
(2) How the applicant proposes to monitor whether a fellow is making satisfactory progress toward the degree for which the fellowship has been awarded;
(3) How the applicant proposes to identify and meet the academic needs of fellows;
(4) How the applicant proposes to maintain enrollment of graduate students from traditionally underrepresented backgrounds; and
(5) The extent to which the policies and procedures the applicant proposes to institute for administering the project are likely to ensure efficient and effective project implementation, including assistance to and oversight of the project director.
(g)
(1) The applicant will provide, from any funds available to it, sufficient funds to support the financial needs of the fellows if the funds made available under the program are insufficient;
(2) The institution's social and academic environment is supportive of the academic success of students from traditionally underrepresented backgrounds on the applicant's campus;
(3) Students receiving fellowships under this program will receive stipend support for the time necessary to complete their courses of study, but in no case longer than 5 years; and
(4) The applicant demonstrates a financial commitment, including the nature and amount of the institutional matching contribution, and other institutional commitments that are likely to ensure the continuation of project activities for a significant period of time following the period in which the project receives Federal financial assistance.
(h)
(1) The qualifications of the project director;
(2) The qualifications of other key personnel to be used in the project;
(3) The time commitment of key personnel, including the project director, to the project; and
(4) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are
(i)
(1) The applicant shows a clear understanding of the acceptable uses of program funds; and
(2) The costs of the project are reasonable in relation to the objectives of the project.
(j)
(1) Relate to the specific goals and measurable objectives of the project;
(2) Assess the effect of the project on the students receiving fellowships under this program, including the effect on persons of different racial and ethnic backgrounds, genders, and ages, and on persons with disabilities who are served by the project;
(3) List both process and product evaluation questions for each project activity and outcome, including those of the management plan;
(4) Describe both the process and product evaluation measures for each project activity and outcome;
(5) Describe the data collection procedures, instruments, and schedules for effective data collection;
(6) Describe how the applicant will analyze and report the data so that it can make adjustments and improvements on a regular basis; and
(7) Include a time-line chart that relates key evaluation processes and benchmarks to other project component processes and benchmarks.
(k)
(a)
(2) If appropriations for this program are insufficient to fund all continuation grantees for the second and third years at the approved funding level, the Secretary prorates the available funds, if any, among the continuation grantees and, if necessary, awards continuation grants of less than $100,000.
(b)
(1) An equitable geographic distribution of grants to eligible applicant institutions of higher education.
(2) An equitable distribution of grants to eligible applicant public and eligible applicant private institutions of higher education.
(a) For each application period, the Secretary establishes as an area of national need and gives absolute preference to one or more of the general disciplines and sub-disciplines listed as priorities in the appendix to this part or the resulting interdisciplines.
(b) The Secretary announces the absolute preferences in a notice published in the
(a) In selecting individuals to receive fellowships, an academic department shall consider only individuals who—
(1) Are currently enrolled as graduate students, have been accepted at the grantee institution, or are enrolled or accepted as graduate students at an eligible nondegree-granting institution;
(2) Are of superior ability;
(3) Have an excellent academic record;
(4) Have financial need;
(5) Are planning to pursue the highest possible degree available in their course of study;
(6) Are planning a career in teaching or research;
(7)Are not ineligible to receive assistance under 34 CFR 75.60; and
(8)(i) Are United States citizens or nationals;
(ii) Are permanent residents of the United States;
(iii) Provide evidence from the Immigration and Naturalization Service that they are in the United States for other than a temporary purpose with the intention of becoming permanent residents; or
(iv) Are citizens of any one of the Freely Associated States.
(b) An individual who satisfies the eligibility criteria in paragraph (a) of this section, but who attends an institution that does not offer the highest possible degree available in the individual's course of study, is eligible for a fellowship if the individual plans to attend subsequently an institution that offers this degree.
An individual shall apply directly to an academic department of an institution of higher education that has received a grant.
(a) The Secretary awards to the institution of higher education a stipend and an institutional payment for each individual awarded a fellowship under this part.
(b) If an academic department of an institution of higher education is unable to use all of the amounts available to it under this part, the Secretary reallots the amounts not used to academic departments of other institutions of higher education for use in the academic year following the date of the reallotment.
(a) For a fellowship initially awarded for an academic year prior to the academic year 1993-94, the institution shall pay the fellow a stipend in an amount that equals the fellow's financial need or $10,000, whichever is less.
(b) For a fellowship initially awarded for the academic year 1993-94, or any succeeding academic year, the institution shall pay the fellow a stipend at a level of support equal to that provided by the National Science Foundation graduate fellowships, except that this amount must be adjusted as necessary so as not to exceed the fellow's demonstrated level of financial need as determined under part F of title IV of the HEA. The Secretary announces the amount of the stipend in a notice published in the
(a) For academic year 1998-1999, the amount of the institutional payment received by an institution of higher education for each student awarded a fellowship at the institution is $10,222. Thereafter, the Secretary adjusts the amount of the institutional payment annually in accordance with inflation as determined by the United States Department of Labor's Consumer Price Index for the previous calendar year. The Secretary announces the amount of the institutional payment in a notice published in the
(b) The institutional allowance paid under paragraph (a) of this section is reduced by the amount the institution charges and collects from a fellowship recipient for tuition and other expenses
(a) An academic department makes a commitment to a fellow at any point in his or her graduate study for the length of time necessary for the fellow to complete the course of graduate study, but in no case longer than five years.
(b) An academic department shall not make a commitment under paragraph (a) of this section to provide stipend support unless the academic department has determined that adequate funds are available to fulfill the commitment either from funds received or anticipated under this part or from institutional funds.
The institution shall provide to fellows at least one academic year of supervised training in instruction at the graduate or undergraduate level at the schedule of at least one-half-time teaching assistant.
(a) The institutional payment must be first applied against a fellow's tuition and fees.
(b) After payment of a fellow's tuition and fees, the institutional payment may be applied against educational expenses of the fellow that are not covered by tuition and fees and are related to the academic program in which the fellow is enrolled. These expenses include the following:
(1) Costs for rental or purchase of any books, materials, or supplies required of students in the same course of study.
(2) Costs of computer hardware, project specific software, and other equipment prorated by the length of the student's fellowship over the reasonable life of the equipment.
(3) Membership fees of professional associations.
(4) Travel and per diem to professional association meetings and registration fees.
(5) International travel, per diem, and registration fees to participate in educational activities.
(6) Expenses incurred in research.
(7) Costs of reproducing and binding of educational products.
(c) The institutional payment must supplement and, to the extent practical, increase the funds that would otherwise be made available for the purpose of the program and, in no case, to supplant institutional funds currently available for fellowships.
(a) The institutional matching contribution may be used to—
(1) Provide additional fellowships to graduate students who are not already receiving fellowships under this part and who satisfy the requirements of § 648.40;
(2) Pay for tuition, fees, and the costs listed in § 648.62(b);
(3) Pay for costs of providing a fellow's instruction that are not included in the tuition or fees paid to the institution in which the fellow is enrolled; and
(4) Supplement the stipend received by a fellow under § 648.51 in an amount not to exceed a fellow's financial need.
(b) An institution may not use its institutional matching contribution to fund fellowships that were funded by the institution prior to the award of the grant.
Neither grant funds nor the institutional matching funds may be used to
(a) An institution that receives a grant shall disburse a stipend to a fellow in accordance with its regular payment schedule, but shall not make less than one payment per academic term.
(b) If a fellow withdraws from an institution before completion of an academic term, the institution may award the fellowship to another individual who satisfies the requirements in § 648.40.
(c) If a fellowship is vacated or discontinued for any period of time, the institution shall return a prorated portion of the institutional payment and unexpended stipend funds to the Secretary, unless the Secretary authorizes the use of those funds for a subsequent project period. The institution shall return the prorated portion of the institutional payment and unexpended stipend funds at a time and in a manner determined by the Secretary.
(d) If a fellow withdraws from an institution before the completion of the academic term for which he or she received a stipend installment, the fellow shall return a prorated portion of the stipend installment to the institution at a time and in a manner determined by the Secretary.
(a) An institution of higher education that receives a grant shall provide to the Secretary, prior to the receipt of grant funds for disbursement to a fellow, a certification that the fellow is enrolled in, is making satisfactory progress in, and is devoting essentially full time to study in the academic field for which the grant was made.
(b) An institution of higher education that receives a grant shall keep records necessary to establish—
(1) That each student receiving a fellowship satisfies the eligibility requirements in § 648.40;
(2) The time and amount of all disbursements and return of stipend payments;
(3) The appropriate use of the institutional payment; and
(4) That assurances, policies, and procedures provided in its application have been satisfied.
To continue to be eligible for a fellowship, a fellow must—
(a) Maintain satisfactory progress in the program for which the fellowship was awarded;
(b) Devote essentially full time to study or research in the academic field in which the fellowship was awarded; and
(c) Not engage in gainful employment, except on a part-time basis in teaching, research, or similar activities determined by the academic department to be in support of the fellow's progress toward a degree.
The Secretary may give an absolute preference to any of the academic areas listed as disciplines or subdisciplines below, or the resulting inter-disciplines. The list was derived from the Classification of Instructional Programs (CIP) developed by the Office of Educational Research and Improvement of the U.S. Department of Education and includes the instructional programs that may constitute courses of studies toward graduate degrees. The code number to the left of each discipline and subdiscipline is the Department's identification code for that particular type of instructional program.
20 U.S.C. 1134, 1134d-1134g, unless otherwise noted.
(a) The Patricia Roberts Harris Fellowship Program provides, through institutions of higher education, grants to assist in making available the benefits of master's level, professional, and doctoral education programs to women and individuals from minority groups who are underrepresented.
(b) Each individual recipient of a fellowship under this program is to be known as a Patricia Roberts Harris Graduate Fellow.
Institutions of higher education, offering a program of post-baccalaureate study leading to a master's level, professional, or doctoral degree, other than schools or departments of divinity, are eligible to receive grants under this program.
(a) The Secretary makes grants to institutions of higher education to enable the institutions to provide fellowships in master's level, professional, and doctoral education programs.
(b)(1) In awarding fellowships for master's level and professional study, the institution must give priority to one or more of the following groups—
(i) Women who are pursuing master's level or professional study in academic fields in which they are underrepresented;
(ii) Individuals from minority groups who are pursuing master's level or professional study in academic fields in which they are underrepresented;
(iii) Women who are pursuing master's level study leading to careers that serve the public interest; or
(iv) Individuals from minority groups who are pursuing master's level study leading to careers that serve the public interest.
(2) In awarding fellowships for doctoral study, the institution must give priority to one or more of the following groups—
(i) Women undertaking doctoral study; or
(ii) Individuals from traditionally underrepresented groups undertaking doctoral study.
The Secretary reserves—
(a) Fifty percent of the funds appropriated for this program to make grants for projects that provide fellowships for master's level or professional study; and
(b) Fifty percent of the funds appropriated for this program to make grants for projects that provide fellowships for doctoral study.
The following regulations apply to the Patricia Roberts Harris Fellowship Program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 649.
(a)
(b)
(i) Directly administers or supervises postbaccalaureate instruction in a specific discipline; and
(ii) Has the authority to award academic course credit acceptable to meet degree requirements at an institution of higher education.
(i) A postbaccalaureate program of study leading to a degree required for admission to practice a profession; or
(ii) Any post-master's or doctoral degree that does not require a dissertation.
(i) As indicated by—
(A) The most current edition of the Department's
(B) The National Research Council's
(C) Other standard statistical references, as announced annually in the
(ii) As documented by national survey data submitted to and accepted by the Secretary on a case-by-case basis.
(i) A citizen of the United States; or
(ii) A person defined in the Immigration and Nationality Act, 8 U.S.C. 1101(a)(22), who, though not a citizen of the United States, owes permanent allegiance to the United States.
(a) To apply for a grant under this part, an institution of higher education must submit an application that responds to the appropriate selection criteria in §§ 649.21 and 649.31.
(b) An institution of higher education's application must describe how the institution will select eligible individuals to receive fellowships. This description must include procedures that ensure that—
(1) The selected individuals will have the capability to achieve the academic goals of the fellowship; and
(2) The institution will give priority to members of one or more of the groups to which priority must be given under § 649.3(b)(1).
(c) An institution of higher education may apply for a grant under this part for the following types of fellowships:
(1) Master's Level and Professional Study Fellowships.
(2) Doctoral Study Fellowships.
(d) An institution of higher education may submit no more than one application for new awards for Master's Level and Professional Study Fellowships and no more than one application for new awards for Doctoral Study Fellowships in a given application period.
(a) The Secretary evaluates an application for master's level and professional study fellowships on the basis of the criteria in § 649.21.
(b) The Secretary awards up to 100 points for these criteria.
(c) The maximum possible score for each criterion is indicated in parentheses.
The Secretary uses the following criteria to evaluate an application:
(a)
(i) Evidence that the institution's social and academic environment is supportive of the academic success of students who are members of the priority group or groups;
(ii) The availability of other sources of financial aid and support for students who are members of the priority group or groups; and
(iii) The employment of women or individuals from minority groups or both, depending on the group or groups to which the institution proposes to give priority, among the administrators and faculty in the institution.
(2)
(i) The Secretary reviews each application for information that describes the applicant's recruitment plan.
(ii) The Secretary looks for information that shows—
(A) The applicant's active and aggressive efforts, previous and current, to identify and attract students who are members of the group or groups to
(B) The applicant's previous and current efforts in successfully preparing students from the group or groups to which the applicant proposes to give priority for careers in which members of those groups are underrepresented; and
(C) The applicant's success in providing students with access to careers in which women and minority groups are underrepresented.
(3)
(4)
(5)
(i) Relate to the specific goals and measurable objectives of the project;
(ii) Include both process and product evaluation measures that are objective and designed to produce data that are quantifiable; and
(iii) Describe how the applicant will analyze and report the data so that it can make adjustments and improvements on a regular basis.
(b)
(i) The applicant describes the general and specific objectives of the project with respect to each academic field that are realistic and measurable; and
(ii) The objectives of the project with respect to each academic field further the purposes of the authorizing statute by assisting in making available the benefits of master's level and professional education programs to one or more of the groups listed in § 649.3(b)(1) of this part.
(2)
(i) The needs of the applicant within each academic field that are addressed by the project;
(ii) How the applicant identified those needs;
(iii) How those needs will be met by the project within each academic field; and
(iv) The benefits to be gained by meeting those needs.
(3)
(i) The quality of the design of the project with respect to each academic field;
(ii) The extent to which the plan of management is effective and ensures proper and efficient administration of the project within each academic field;
(iii) How well the objectives of the project within each academic field relate to the purpose of the program;
(iv) How well the project activities of each academic field within the project are described and the potential of those activities to achieve project objectives in a cost-effective manner;
(v) The quality of the applicant's plan to use its resources and personnel to achieve each objective; and
(vi) How the applicant will ensure that project participants who are otherwise eligible to participate are selected without regard to race, color, national origin, religion, gender, age, or disabling condition, except as necessary to implement the priority or priorities established in accordance with the requirements of § 649.3(b)(1).
(4)
(i) The course offerings and academic requirements for the academic program; and
(ii) The focus on, and capability for, research or teaching.
(5)
(i) The Secretary reviews each application to determine the quality of key personnel the applicant plans to use on the project, including—
(A) The qualifications of the project director (2 points);
(B) The qualifications of the key faculty to be used for the project in each academic field (6 points);
(C) The time that each person referred to in paragraphs (b)(5)(i) (A) and (B) of this section will commit to the project (2 points); and
(D) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected without regard to race, color, national origin, religion, gender, age, or disabling condition, except pursuant to a lawful affirmative action plan (2 points).
(ii) To determine personnel qualifications under paragraphs (b)(5)(i) (A) and (B) of this section, the Secretary considers—
(A) Experience and training in areas related to the objectives of the project or the relevant academic field within the project; and
(B) Any other qualifications that pertain to the quality of the project.
(6)
(a)(1) The Secretary gives an absolute preference to applicants proposing to provide fellowships in the award of which priority is given to women or individuals from minority groups, or both, who are pursuing master's level or professional study and are underrepresented in the academic field for which the grant award is made.
(2) The Secretary announces the absolute preference annually in the
(b)(1) The Secretary gives a competitive preference of one point to applicants proposing to provide fellowships in the award of which priority is given to women or individuals from minority groups, or both, who are pursuing master's level study leading to careers that serve the public interest.
(2) This point is in addition to any points the applicant earns under the selection criteria for the program.
(c)(1) The Secretary gives an absolute preference to applicants proposing to provide fellowships in academic career fields of high national priority as established by the Secretary from among one or more of the academic areas listed in the appendix to this part or the resulting subdisciplinary or interdisciplinary academic areas.
(2) The Secretary announces the absolute preference annually in the
(a) The Secretary evaluates an application for doctoral study fellowships on the basis of the criteria in § 649.31.
(b) The Secretary awards up to 100 points for these criteria.
(c) The maximum possible score for each criterion is indicated in parentheses.
The Secretary uses the following criteria to evaluate an application:
(a)
(i) Evidence that the institution's social and academic environment is supportive of the academic success of students who are members of the priority group or groups;
(ii) The availability of other sources of financial aid and support for students who are members of the priority group or groups; and
(iii) The employment of women or individuals who are from minority groups or both, depending on the group or groups to which the institution proposes to give priority, among the administrators and faculty in the institution.
(2)
(i) The Secretary reviews each application for information that describes the applicant's recruitment plan.
(ii) The Secretary looks for information that shows—
(A) The applicant's active and aggressive efforts, previous and current, to identify and attract qualified students who are members of the group or groups to which the applicant proposes to give priority;
(B) The applicant's previous and current efforts in successfully preparing students who are members of the group or groups to which the applicant proposes to give priority for careers in which members of the group or groups are underrepresented; and
(C) The applicant's success in providing students with access to careers in which women and minority groups are underrepresented.
(3)
(4)
(5)
(i) Relate to the specific goals and measurable objectives of the project;
(ii) Include both process and product evaluation measures that are objective and designed to produce data that are quantifiable; and
(iii) Describe how the applicant will analyze and report the data so that it can make adjustments and improvements on a regular basis.
(b)
(i) The applicant describes the general and specific objectives of the project with respect to each academic field that are realistic and measurable; and
(ii) The objectives of the project, with respect to each academic field, further the purposes of the authorizing statute by assisting in making available the benefits of doctoral education programs to member of the group or groups to which the applicant proposes to give priority.
(2)
(i) The needs of the applicant addressed by the project within each academic field;
(ii) How the applicant identified those needs;
(iii) How those needs will be met by the project within each academic field; and
(iv) The benefits to be gained by meeting those needs.
(3)
(i) The quality of the design of the project, with respect to each academic field;
(ii) The extent to which the plan of management is effective and ensures proper and efficient administration of the project within each academic field;
(iii) How well the objectives of the project within each academic field relate to the purpose of the program;
(iv) How well the project activities within each academic field are described and the potential of those activities to achieve project objectives in a cost-effective manner;
(v) The quality of the applicant's plan to use its resources and personnel to achieve each objective; and
(vi) How the applicant will ensure that project participants who are otherwise eligible to participate are selected without regard to race, color, national origin, religion, gender, age, or disabling condition, except as necessary to implement the priority or priorities established in accordance with the requirements of § 649.3(b)(2).
(4)
(i) The course offerings and academic requirements for the academic program; and
(ii) The focus on, and capacity for, research or teaching.
(5)
(i) The Secretary reviews each application to determine the quality of key personnel the applicant plans to use on the project, including—
(A) The qualifications of the project director (2 points);
(B) The qualifications of each of the key faculty to be used on the project in each academic field (6 points);
(C) The time that each person referred to in paragraphs (b)(5)(i) (A) and (B) of this section will commit to the project (2 points); and
(D) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected without regard to race, color, national origin, religion, gender, age, or disabling condition, except pursuant to a lawful affirmative action plan (2 points).
(ii) To determine personnel qualifications under paragraphs (b)(5)(i) (A) and (B) of this section, the Secretary considers—
(A) Experience and training in areas related to the objectives of the project or the relevant academic field within the project; and
(B) Any other qualifications that pertain to the quality of the project.
(6)
(i) The Secretary reviews each application to determine the adequacy of the applicant's plans to provide two years of support for each fellow, immediately following the second year of fellowship support, including at least one year of supervised teaching.
(ii) In reviewing the applicant's plan of support for the fellows, the Secretary considers—
(A) The applicant's financial support for each fellow; and
(B) The applicant's plan for the supervision of each fellow's teaching assignment.
(7)
(a) The Secretary gives an absolute preference to applicants proposing to provide fellowships in the award of which priority is given to members of one or more of the groups identified in § 649.3(b)(2).
(b) The Secretary gives an absolute preference to applicants proposing to
(c) The Secretary announces the absolute preferences annually in the
(a) In selecting individuals to receive master's level and professional study fellowships, the institution of higher education shall—
(1) Give priority to members of one or more of the groups identified for priority in § 649.3(b)(1); and
(2) Select only individuals who—
(i) Have been accepted for or are enrolled in a program of study leading to a master's level or professional degree in the academic field for which the institution received a grant;
(ii) Plan to pursue an academic or professional career in the academic field of study for which the institution received the grant;
(iii)(A) Are nationals of the United States;
(B) Are in the United States for other than a temporary purpose and intend to become permanent residents; or
(C) Are permanent residents of the Trust Territory of the Pacific Islands; and
(iv) Are not ineligible to receive assistance under 34 CFR 75.60, as added on July 8, 1992 (57 FR 30328, 30337).
(b) In selecting individuals to receive doctoral study fellowships, the institution of higher education shall—
(1) Give priority to members of one or more of the groups identified for priority in § 649.3(b)(2); and
(2) For doctoral study fellowships other than doctoral study leading to an academic career, select only individuals who—
(i) Have been accepted for or are enrolled in a program of study leading to a doctoral degree in the academic field for which the institution received a grant;
(ii) Plan to pursue a professional career in the academic field of study for which the institution received the grant;
(iii)(A) Are nationals of the United States;
(B) Are in the United States for other than a temporary purpose and intend to become permanent residents; or
(C) Are permanent residents of the Trust Territory of the Pacific Islands; and
(iv) Are not ineligible to receive assistance under 34 CFR 75.60, as added on July 8, 1992 (57 FR 30328, 30337); and
(3) For fellowships for doctoral study leading to an academic career, select only individuals who—
(i) Have been accepted for or are enrolled in a program of study leading to a doctoral degree in the academic field for which the institution received a grant;
(ii) Plan to pursue an academic career in the academic field of study for which the institution received the grant;
(iii) Are citizens of the United States; and
(iv) Are not ineligible to receive assistance under 34 CFR 75.60, as added on July 8, 1992 (57 FR 30328, 30337).
An individual must apply directly to an institution of higher education that has received a grant.
(a) An award for a fellowship for a master's level or professional degree program of study is for the normal period of time for completing the program or a total of three years, whichever is less.
(b) A fellow may apply to the Secretary for an additional period of fellowship support of up to 12 months. The fellow's application must include—
(1) The specific facts detailing the reasons why the additional period of support is necessary;
(2) A certification by the institution that it is aware of the fellow's application and that the fellow has attained satisfactory progress in the fellow's academic studies; and
(3) A recommendation from the institution that the additional period of fellowship support of up to 12 months is necessary.
(c) The institution shall request approval for the additional support in its third-year noncompeting continuation application, as required under 34 CFR 75.253 for multiyear project periods.
(a) An award for a fellowship for doctoral study is for a total of three years, consisting of not more than two years of fellowship support for study or research, and not more than one year of support for dissertation work, provided that the fellow has attained satisfactory progress prior to the dissertation stage.
(b) Following the two years of fellowship support for study or research, the institution of higher education shall provide—
(1) Financial support in the amount of the fellow's financial need, as defined in § 649.6(b), or in an amount equal to the stipend awarded in the last year of fellowship support, whichever is less, for two years;
(2) A waiver of tuition and fees or an allowance on behalf of the fellow as full payment of tuition and fees required of the fellow by the institution as part of the fellow's instructional program for two years; and
(3)(i) Teaching requirements for the fellow that equal those required of other graduate teaching assistants at that institution; and
(ii) Supervision of the fellow's teaching for one year.
(c) Following two years of institutional support, the institution must include in its application for the third year of fellowship support for the fellow's dissertation work a certification that—
(1) The institution has provided two years of institutional support;
(2) The fellow satisfactorily completed one year of supervised teaching; and
(3) The fellow satisfactorily completed all pre-dissertation requirements.
To continue to receive payments under a fellowship, a fellow must—
(a) Maintain satisfactory progress;
(b) Devote essentially full time to study or research (including acting as a teaching or research assistant, as required as a condition for award of the degree) in the academic field for which the fellowship was awarded; and
(c) Not engage in gainful employment during the period of the fellowship, except on a part-time basis in teaching, research, or similar types of activities approved by the Secretary.
(a) The institution shall calculate the amount of a fellow's financial need annually, in accordance with Part F of Title IV of the HEA.
(b) For a fellowship initially awarded for an academic year prior to the academic year 1993-1994, the institution shall pay the fellow a stipend in the amount of the fellow's financial need or $10,000, whichever is less.
(c) For a fellowship initially awarded for the academic year 1993-1994 or any succeeding academic year, the institution shall pay the fellow a stipend at a level of support equal to that provided by the National Science Foundation
(a) With respect to awards made for the academic year 1993-1994, the Secretary makes a payment of $9,000 to the institution of higher education for each individual awarded a fellowship at the institution. The Secretary adjusts the institutional payment annually thereafter in accordance with inflation as determined by the U.S. Department of Labor's Consumer Price Index for the previous calendar year.
(b) An institution shall treat the institutional payment made by the Secretary on behalf of a fellow as full payment of tuition and fees required of the fellow by the institution as part of the fellow's instructional program.
(a) The Secretary pays to the institution of higher education the fellowship stipend and institutional payment for each individual enrolled in that institution that is awarded a fellowship under this program.
(b) If an institution of higher education is unable to use all of the amounts available under this program, the Secretary—on such dates each fiscal year as the Secretary determines—reallots the amounts not used to other institutions of higher education that can use the grants authorized under this program in the academic year following the reallotment.
(c) The Secretary does not award a fellowship under this part for study at a school or department of divinity.
(a) If a fellow withdraws from an institution before completion of an academic term, the institution shall refund to the Secretary a pro-rated portion of the institutional payment that it received for that fellow. The institution shall return the funds to the Secretary at a time and in a manner as the Secretary requires.
(b) An institution shall disburse a stipend to a fellow in accordance with its regular payment schedule for graduate assistants, but shall not make less than one payment per academic term. If the fellowship is vacated or discontinued, the institution shall return unexpended funds to the Secretary at a time and in a manner as the Secretary requires.
(c) A fellow who withdraws from an institution before completion of an academic term for which he or she received a stipend installment shall return a pro-rated portion of the stipend installment to the institution at a time and in a manner as the Secretary requires.
(d) If a fellow first enrolls at an institution in the spring term, the institution shall disburse a pro-rated stipend to the fellow and use a pro-rated portion of the institutional payment for that fellow and shall carry over for disbursement the following academic year the remaining portion of the stipend and the institutional payment for that fellow.
(a) An institution of higher education that receives a grant shall provide to the Secretary, prior to receipt of funds for disbursement to a fellow after the fellow's first academic term, a certification that the fellow is enrolled in, is making satisfactory progress in, and is devoting essentially full time to study in the academic field for which the grant was made.
(b) An institution of higher education that receives a grant shall keep records as are necessary to establish the time and amount of all stipend disbursements.
The Secretary may give an absolute preference to applicants proposing to provide fellowships in academic areas listed below, or the resulting subdisciplinary or inter-disciplinary academic areas.
The list was derived from the
20 U.S.C. 1134-1134d, unless otherwise noted.
(a) Under the Jacob K. Javits Fellowship Program the Secretary awards fellowships to students of superior ability selected on the basis of demonstrated achievement, financial need, and exceptional promise, for study at the doctoral level in selected fields of the arts, humanities, and social sciences.
(b) Students awarded fellowships under this program are called Jacob K. Javits Fellows.
An individual is eligible to receive a fellowship if the individual—
(a) Is enrolled at an institution of higher education in the program of study leading to a doctoral degree, and is not studying for a religious vocation, in the academic field for which the fellowship is awarded;
(b) Meets the eligibility requirements established by the Fellowship Board;
(c) Is not ineligible to receive assistance under 34 CFR 75.60, as added on July 8, 1992 (57 FR 30328, 30337); and
(d)(1) Is pursuing a doctoral degree that will not lead to an academic career and is—
(i) A citizen or national of the United States;
(ii) A permanent resident of the United States;
(iii) In the United States for other than a temporary purpose and intends to become a permanent resident; or
(iv) A citizen of any one of the Freely Associated States; or
(2) Is pursuing a doctoral degree that will lead to an academic career and is a citizen of the United States.
The following regulations apply to this program:
(a) The regulations in this part
(b) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs), except for the following:
(i) Subpart C (How to Apply for a Grant);
(ii) Subpart D (How Grants Are Made); and
(iii) Sections 75.580 through 75.592 of subpart E.
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations), except for the terms “grantee” and “recipient.”
(4) 34 CFR part 82 (New Restrictions on Lobbying).
(5) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(6) 34 CFR part 86 (Drug-Free Schools and Campuses).
The following definitions apply to terms used in this part:
(1) Directly administers or supervises post-baccalaureate instruction in a specific discipline; and
(2) Has the authority to award academic course credit acceptable to meet degree requirements at an institution of higher education.
(1) Has actual knowledge that the statement is false or fictitious;
(2) Acts in deliberate ignorance of the truth or falsity of the statement; or
(3) Acts in reckless disregard of the truth or falsity of the statement.
The Secretary awards fellowships consisting of the following:
(a) A stipend paid to the fellow, based upon an annual determination of the fellow's financial need, as described in § 650.42.
(b) An annual payment made to the institution in which the fellow is enrolled as described in § 650.41.
An individual shall apply to the Secretary for a fellowship award in response to an application notice published by the Secretary in the
(a) The Fellowship Board establishes criteria for the selection of fellows.
(b) Each year the Fellowship Board selects specific fields of study, and the number of fellows in each field (within the humanities, arts and social sciences), for which fellowships will be awarded.
(c) The Fellowship Board, or in the event the Secretary contracts with a non-governmental entity to administer the program, that non-governmental entity, appoints panels of distinguished individuals in each field to evaluate applications.
(d) The Secretary may make awards of the fellowships each year in two or more stages, taking into account at each stage the amount of funds remaining after the level of funding for awards previously made has been established or adjusted.
A fellow may use the fellowship only for enrollment in a doctoral program at an institution of higher education accredited by an accrediting agency or association recognized by the Secretary, which accepts the fellow for graduate study, and which has agreed to comply with the provisions of this part applicable to institutions.
(a) An individual notified by the Secretary of selection as a fellow shall inform the Secretary of the individual's acceptance in the manner and time prescribed by the Secretary in the notification.
(b) If an individual fails to comply with the provisions of paragraph (a) of this section, the Secretary treats the individual's failure to comply as a refusal of the fellowship.
(a) The Secretary withdraws an offer of a fellowship to an individual only if the Secretary determines that the individual submitted fraudulent information on the application.
(b) The Secretary considers the application to contain fraudulent information if the application contains a statement that—
(1) The applicant knows or has reason to know—
(i) Asserts a material fact that is false or fictitious; or
(ii) Is false or fictitious because it omits a material fact that the person making the statement has a duty to include in the statement; and
(2) Contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement.
(a) An individual may receive a fellowship for a doctoral degree program of study for a total of 48 months or the time required for receiving the doctoral degree, whichever is less.
(b)(1) An individual may receive a fellowship for no more than 24 months for dissertation work, without the prior approval of the Secretary.
(2) A fellow may apply to the Secretary for an additional period of fellowship support for dissertation work. The fellow's application must include—
(i) The specific facts detailing the reasons why the additional period of dissertation work support is necessary;
(ii) A certification by the institution that it is aware of the fellow's application and that the fellow has attained satisfactory progress in the fellow's academic studies; and
(iii) A recommendation from the institution that the additional period of fellowship support for dissertation work is necessary.
(c) A fellow who maintains satisfactory progress in the program of study for which the fellowship was awarded may have the fellowship renewed annually for the total length of time described in paragraph (a) of this section.
In order to continue to receive payments under a fellowship, a fellow shall—
(a) Maintain satisfactory progress in the program for which the fellowship was awarded as determined by the institution of higher education;
(b) Devote essentially full time to study or research in the field in which the fellowship was awarded, as determined by the institution of higher education;
(c) Not engage in gainful employment during the period of the fellowship except on a part-time basis, for the institution of higher education at which the fellowship was awarded, in teaching, research, or similar activities approved by the Secretary; and
(d) Begin study under the fellowship in the academic year specified in the fellowship award.
(a) An institution of higher education may allow a fellow to interrupt study for a period not to exceed 12 months, but only if the interruption of study is—
(1) For the purpose of work, travel, or independent study, if the independent study is away from the institution and supportive of the fellow's academic program; and
(2) Approved by the institution of higher education.
(b) A fellow may continue to receive payments during the period of interruption only if the fellow's interruption of study is for the purpose of travel or independent study that is supportive of the fellow's academic program.
(c) A fellow may not receive payments during the period of interruption if the fellow's interruption of study is for the purpose of travel that is not supportive of the fellow's academic program, or work, whether supportive of the fellow's academic program or not.
(d) The Secretary makes a pro rata institutional payment to the institution of higher education in which the fellow is enrolled during the period the fellow receives payments as described in paragraph (b) of this section.
After an award is made, a fellow may not make any change in the field of study or institution attended without the prior approval of the Secretary.
Each individual who is awarded a fellowship shall keep such records and submit such reports as are required by the Secretary.
Students enrolled in an otherwise eligible institution of higher education may receive fellowships only if the institution enters into an agreement
(a) With respect to the awards made for the academic year 1998-1999, the Secretary makes a payment of $10,222 to the institution of higher education for each individual awarded a fellowship for pursuing a course of study at the institution. The Secretary adjusts the amount of the institutional payment annually thereafter in accordance with inflation as determined by the U.S. Department of Labor's Consumer Price Index for the previous calendar year.
(b) If the institution of higher education charges and collects amounts from a fellow for tuition or other expenses required by the institution as part of the fellow's instructional program, the Secretary deducts that amount from the institutional payment.
(c) If the fellow is enrolled for less than a full academic year, the Secretary pays the institution a pro rata share of the allowance.
(a) The institution annually shall calculate the amount of a fellow's financial need in the same manner as that in which the institution calculates its students’ financial need under part F of title IV of the HEA.
(b) For a fellowship initially awarded for an academic year prior to the academic year 1993-1994, the institution shall pay the fellow a stipend in the amount of the fellow's financial need or $10,000, whichever is less.
(c) For a fellowship initially awarded for the academic year 1993-1994 or any succeeding academic year, the institution shall pay the fellow a stipend at a level of support equal to that provided by the National Science Foundation graduate fellowships, except that the amount must be adjusted as necessary so as not to exceed the fellow's demonstrated level of financial need.
(a) An institution shall disburse a stipend to a fellow no less frequently than once per academic term. If the fellowship is vacated or discontinued, the institution shall return any unexpended funds to the Secretary at such time and in such manner as the Secretary may require.
(b) If a fellow withdraws from an institution before completion of an academic term, the institution shall refund to the Secretary a prorated portion of the institutional payment that it received with respect to that fellow. The institution shall return those funds to the Secretary at such time and in such manner as the Secretary may require.
(c) A fellow who withdraws from an institution before completion of an academic term for which the fellow received a stipend installment shall return a prorated portion of the stipend installment to the institution at such time and in such manner as the Secretary may require.
(a) An institution shall provide to the Secretary, prior to receiving funds for disbursement to a fellow, a certification from an appropriate official at the institution stating whether that fellow is making satisfactory progress in, and is devoting essentially full time to the program for which the fellowship was awarded.
(b) An institution shall keep such records as are necessary to establish the timing and amount of all disbursements of stipends.
20 U.S.C. 1070d-31 to 1070d-41, unless otherwise noted.
Under the Robert C. Byrd Honors Scholarship Program, the Secretary makes grants to the States to provide scholarships for study at institutions of higher education to outstanding high school graduates who show promise of continued excellence, in an effort to recognize and promote student excellence and achievement.
(a) States are eligible for grants under this program.
(b) Students who meet the eligibility criteria in §§ 654.40 and 654.51 are eligible for scholarships under this program.
A State may use its funds under this program, including funds collected from scholars under § 654.60(a)(3), only to make scholarship payments to scholars.
The following regulations apply to this program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR 75.60-75.62 (regarding the ineligibility of certain individuals to receive assistance under part 75 (Direct Grant Programs)).
(2) 34 CFR part 76 (State-Administered Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 80 (Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments).
(6) 34 CFR part 82 (New Restrictions on Lobbying).
(7) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(8) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 654.
(a)
(b)
(i) A high school diploma;
(ii) A General Education Development (GED) Certificate; or
(iii) Any other evidence recognized by the State as the equivalent of a high school diploma.
(a) To apply for a grant under this program, a State must submit a participation agreement to the Secretary for review and approval by the deadline announced annually by the Secretary in the
(b) On the Secretary's approval of its initial participation agreement for fiscal year 1993 or thereafter, a State need not submit a new participation agreement to be considered for funding under this program in subsequent years, except that any changes in the State's criteria and procedures must be incorporated in a revised participation agreement which must be submitted to the Secretary for review and approval.
A State's participation agreement must include the following:
(a) A description of the criteria and procedures that the State, through its State educational agency (SEA), plans to use to administer this program in accordance with the requirements of this part, including the criteria and procedures it plans to use to—
(1) Publicize the availability of Byrd scholarships to students in the State, with particular emphasis on procedures designed to ensure that students from low- and moderate-income families
(2) Select eligible students;
(3) Notify scholars of their selections and scholarship awards;
(4) Monitor the continuing eligibility of scholars;
(5) Disburse scholarship funds in accordance with the requirements of § 654.50; and
(6) Collect scholarship funds improperly disbursed.
(b) Assurances that the SEA will—
(1) Comply with the criteria and procedures in its approved participation agreement;
(2) Submit for the prior written approval of the Secretary any changes in the criteria and procedures in the approved participation agreement; and
(3) Expend the payments it receives under this program only as provided in § 654.3.
The Secretary approves a participation agreement if it contains all of the information and assurances required in § 654.11 and is in compliance with the requirements of this part.
(a) From the funds appropriated for this program, the Secretary allots to each participating State a grant equal to $1,500 multiplied by the number of scholarships the Secretary determines to be available to that State on the basis of the formula described in paragraph (b) of this section.
(b) The number of scholarships that the Secretary allots to each participating State for any fiscal year bears the same ratio to the number of scholarships allotted to all participating States as each State's population ages 5 through 17 which is derived from the most recently available data from the U.S. Bureau of the Census bears to the population ages 5 through 17 in all participating States, except that—
(1) Not fewer than 10 scholarships are allotted to any participating State; and
(2) The District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, American Samoa, the Commonwealth of Northern Mariana Islands, Guam, and the Trust Territory of the Pacific Islands (Palau) each are allotted 10 scholarships.
To apply for a scholarship under this program, a student must follow the application procedures established by the SEA in the student's State of legal residence.
A student is eligible to be selected as a scholar if he or she—
(a) Is a legal resident of the State to which he or she is applying for a scholarship;
(b)(1) Is a U.S. citizen or national;
(2) Provides evidence from the U.S. Immigration and Naturalization Service that he or she—
(i) Is a permanent resident of the United States; or
(ii) Is in the United States for other than a temporary purpose with the intention of becoming a citizen or permanent resident; or
(3) Is a permanent resident of the Trust Territory of the Pacific Islands (Palau);
(c) Becomes a high school graduate in the same secondary school year in which he or she submits the scholarship application;
(d) Has applied or been accepted for enrollment as a full-time student at an institution of higher education;
(e) Is not ineligible to receive assistance as a result of default on a Federal student loan or other obligation, as provided under 34 CFR 75.60; and
(f) Files a Statement of Selective Service Registration Status, in accordance with the provisions of 34 CFR 668.33 of the Student Assistance General Provisions regulations, with the institution he or she plans to attend or is attending.
(a) The SEA shall establish criteria and procedures for the selection of scholars, in accordance with the requirements of this part, after consultation with school administrators, school boards, teachers, counselors, and parents.
(b) The SEA shall establish the selection criteria and procedures to ensure that it selects scholars—
(1) Who are eligible students under the criteria provided in § 654.40;
(2) Who have demonstrated outstanding academic achievement and show promise of continued achievement;
(3) In a manner that ensures an equitable geographic distribution of awards within the State; and
(4) Without regard to—
(i) Whether the secondary school each scholar attends is within or outside the scholar's State of legal residence;
(ii) Whether the institution of higher education each scholar plans to attend is public or private or is within or outside the scholar's State of legal residence;
(iii) Race, color, national origin, sex, religion, disability, or economic background; and
(iv) The scholar's educational expenses or financial need.
(a) Except as provided in paragraph (b) of this section, the SEA shall disburse $1,500 for each year of study for a maximum of four years of study to each scholar who—
(1) Is selected in accordance with the criteria established under § 654.41; and
(2) Meets the requirements for continuing eligibility under § 654.51.
(b)(1) The SEA shall ensure that the total amount of financial aid awarded to a scholar for a year of study does not exceed the total cost of attendance.
(2) The SEA shall ensure that loans are reduced prior to reducing a scholarship awarded under this program.
(c) The SEA shall ensure that the selection process is completed, and the awards made, prior to the end of each secondary school academic year.
(a) A scholar continues to be eligible for scholarship funds as long as the scholar continues to—
(1) Meet the eligibility requirements in § 654.40(b), (e), and (f);
(2) Be enrolled as a full-time student at an institution of higher education except as provided in paragraph (b) of this section; and
(3) Maintain satisfactory progress as determined by the institution of higher education the scholar is attending, in accordance with the criteria established in 34 CFR 668.14(e) of the Student Assistance General Provisions regulations.
(b) In order to be eligible for scholarship funds, a scholar must be enrolled full time for the first year of study. If after the first year of study, the SEA determines that unusual circumstances justify waiver of the full-time attendance requirement, the scholar may enroll part time and continue to receive a scholarship payment. The SEA shall prorate the payment according to the scholar's enrollment status for the academic period during which he or she continues to be enrolled on a part-time basis but remains otherwise eligible for
(a)(1) An SEA may permit a scholar to postpone or interrupt his or her enrollment at an institution of higher education without forfeiting his or her scholarship for up to 12 months, beginning on the date the scholar otherwise would have enrolled in the institution after the SEA awarded his or her scholarship or the date the scholar interrupts enrollment.
(2) A scholar who postpones or interrupts his or her enrollment at an institution of higher education in accordance with standards established by the SEA is not eligible to receive scholarship funds during the period of postponement or interruption, but is eligible to receive scholarship payments on enrollment or re-enrollment at an institution of higher education.
(3) A scholar's periods of postponement or interruption, taken in accordance with standards established by the SEA and not in excess of 12 months, are not considered periods of suspension for the purposes of calculating the 12 months provided for suspension prior to termination under paragraph (b)(2) of this section.
(b)(1) Except as provided in paragraph (a) of this section, if an SEA finds that a scholar fails to meet the requirements of § 654.51 within an award year, it shall suspend the scholar's eligibility to receive scholarship funds until the scholar is able to demonstrate to the satisfaction of the SEA that he or she meets these requirements.
(2) Except as provided in paragraph (b)(3) of this section, a scholar's eligibility for a scholarship is terminated when the total of his or her suspension periods exceeds 12 months.
(3) In exceptional circumstances, the SEA may extend the 12-month suspension period without terminating a scholar's eligibility under paragraph (b)(2) of this section, in accordance with standards established by the SEA.
(c) A scholar who receives an award for a period for which the SEA subsequently determines the scholar was ineligible under the requirements in § 654.40 or 654.51 shall repay to the SEA the total amount of the scholarship funds received for the period during which he or she was ineligible.
(a) To receive and continue to receive payments under this part, an SEA shall—
(1) Comply with the criteria, procedures, and assurances in its approved participation agreement;
(2) Disburse the scholarship funds in accordance with § 654.50 to the scholar, the institution of higher education in which the scholar enrolls, or copayable to the scholar and the institution of higher education in which the scholar enrolls;
(3) Collect any scholarship funds improperly disbursed under § 654.50;
(4) Make reports to the Secretary that the Secretary deems necessary to carry out the Secretary's functions under this part; and
(5) Except as provided in paragraph (b) of this section, expend all funds received from the Secretary for scholarships during the award period specified by the Secretary for those funds.
(b) After awarding all scholarship funds during an award year, as required by paragraph (a)(5) of this section, an SEA may retain any funds that are subsequently returned or collected for scholarship awards in the following award period.
20 U.S.C 1121-1130b, unless otherwise noted.
The regulations in this part govern the administration of the following programs in international education:
(a) The National Resource Centers Program for Foreign Language and Area Studies or Foreign Language and International Studies (section 602 of the Higher Education Act of 1965, as amended);
(b) The Language Resource Centers Program (section 603);
(c) The Undergraduate International Studies and Foreign Language Program (section 604);
(d) The International Research and Studies Program (section 605); and
(e) The Business and International Education Program (section 613).
The following regulations apply to the International Education Programs:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 74 (Administration of Grants to Institutions of Higher Education, Hospitals, and Nonprofit Organizations).
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities), except that part 79 does not apply to 34 CFR parts 660, 669, and 671.
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 655; and
(c) As appropriate, the regulations in—
(1) 34 CFR part 656 (National Resource Centers Program for Foreign Language and Area Studies or Foreign Language and International Studies);
(2) 34 CFR part 657 (Foreign Language and Area Studies Fellowships Program);
(3) 34 CFR part 658 (Undergraduate International Studies and Foreign Language Program);
(4) 34 CFR part 660 (International Research and Studies Program);
(5) 34 CFR part 661 (Business and International Education Program); and
(6) 34 CFR part 669 (Language Resource Centers Program).
(a)
(b)
Subpart B of 34 CFR parts 656, 657, 658, 660, 661, and 669 describes the kinds of projects that the Secretary assists under the International Education Programs.
The Secretary evaluates an applications for International Education Programs on the basis of—
(a) The general criteria in § 655.31; and
(b) The specific criteria in, as applicable, subpart D of 34 CFR parts 658, 660, 661, and 669.
(a)
(2) The Secretary looks for information that shows—
(i) High quality in the design of the project;
(ii) An effective plan of management that ensures proper and efficient administration of the project;
(iii) A clear description of how the objectives of the project relate to the purpose of the program;
(iv) The way the applicant plans to use its resources and personnel to achieve each objective; and
(v) A clear description of how the applicant will provide equal access and treatment for eligible project participants who are members of groups that have been traditionally underrepresented, such as—
(A) Members of racial or ethnic minority groups;
(B) Women; and
(C) Handicapped persons.
(b)
(2) The Secretary looks for information that shows—
(i) The qualifications of the project director (if one is to be used);
(ii) The qualifications of each of the other key personnel to be used in the project. In the case of faculty, the qualifications of the faculty and the degree to which that faculty is directly involved in the actual teaching and supervision of students; and
(iii) The time that each person referred to in paragraphs (b)(2) (i) and (ii) of this section plans to commit to the project; and
(iv) The extent to which the applicant, as part of its nondiscriminatory employment practices, encourages applications for employment from persons who are members of groups that have been traditionally underrepresented, such as members of racial or ethnic minority groups, women, handicapped persons, and the elderly.
(3) To determine the qualifications of a person, the Secretary considers evidence of past experience and training, in fields related to the objectives of the project, as well as other information that the applicant provides.
(c)
(2) The Secretary looks for information that shows—
(i) The budget for the project is adequate to support the project activities; and
(ii) Costs are reasonable in relation to the objectives of the project.
(d)
(2) The Secretary looks for information that shows methods of evaluation that are appropriate for the project and, to the extent possible, are objective and produce data that are quantifiable.
(e)
(2) The Secretary looks for information that shows—
(i) Other than library, facilities that the applicant plans to use are adequate (language laboratory, museums, etc.); and
(ii) The equipment and supplies that the applicant plans to use are adequate.
Except for 34 CFR parts 656, 657, and 661, to the extent practicable and consistent with the criterion of excellence, the Secretary seeks to achieve an equitable distribution of funds throughout the Nation.
20 U.S.C. 1122, unless otherwise noted.
Under the National Resource Centers Program for Foreign Language and Areas Studies or Foreign Language and International Studies (National Resource Centers Program), the Secretary awards grants to institutions of higher education and combinations of institutions to establish, strengthen, and operate comprehensive and undergraduate Centers that will be national resources for—
(a) Teaching of any modern foreign language;
(b) Instruction in fields needed to provide full understanding of areas, regions, or countries in which the modern foreign language is commonly used;
(c) Research and training in international studies and the international and foreign language aspects of professional and other fields of study; and
(d) Instruction and research on issues in world affairs that concern one or more countries.
An institution of higher education or a combination of institutions of higher education is eligible to receive a grant under this part.
A comprehensive or undergraduate National Resource Center—
(a) Teaches at least one modern foreign language;
(b) Provides—
(1) Instruction in fields necessary to provide a full understanding of the areas, regions, or countries in which the modern foreign language taught is commonly used;
(2) Resources for research and training in international studies, and the international and foreign language aspects of professional and other fields of study; or
(3) Instruction and research on issues in world affairs that concern one or more countries;
(c) Provides outreach and consultative services on a national, regional, and local basis;
(d) Maintains linkages with overseas institutions of higher education and other organizations that may contribute to the teaching and research of the Center;
(e) Maintains important library collections;
(f) Employs faculty engaged in training and research that relates to the subject area of the Center;
(g) Conducts projects in cooperation with other centers addressing themes of world, regional, cross-regional, international, or global importance; and
(h) Conducts summer institutes in the United States or abroad designed
The Secretary awards grants to Centers that—
(a) Focus on—
(1) A single country or on a world area (such as East Asia, Africa, or the Middle East) and offer instruction in the principal language or languages of that country or area and those disciplinary fields necessary to provide a full understanding of the country or area; or
(2) International studies or the international aspects of contemporary issues or topics (such as international business or energy) while providing instruction in modern foreign languages; and
(b) Provide training at the—
(1) Graduate, professional, and undergraduate levels, as a comprehensive Center; or
(2) Undergraduate level only, as an undergraduate Center.
(a) A Center may carry out any of the activities described in § 656.3 under a grant received under this part.
(b) The Secretary may make an additional grant to a Center for any one or a combination of the following purposes:
(1) Linkage or outreach between foreign language, area studies, and other international fields and professional schools and colleges.
(2) Linkage or outreach with 2- and 4-year colleges and universities.
(3) Linkage or outreach with departments or agencies of Federal and State governments.
(4) Linkage or outreach with the news media, business, professional, or trade associations.
(5) Summer institutes in foreign area, foreign language, and other international fields designed to carry out the activities in paragraphs (b)(1) through (4) of this section.
The following regulations apply to this program:
(a) The regulations in 34 CFR part 655.
(b) The regulations in this part 656.
The following definitions apply to this part:
(a) The definitions in 34 CFR part 655.
(b)
(c)
(d)
(1) Contributes significantly to the national interest in advanced research and scholarship;
(2) Offers intensive language instruction;
(3) Maintains important library collections related to the area of its specialization;
(4) Makes training available to a graduate, professional, and undergraduate clientele; and
(5) Engages in curriculum development and community outreach.
(e) For purposes of this section,
(f)
(1) Contributes significantly to the national interest through the education of students who matriculate into advanced language and area studies programs or professional school programs;
(2) Incorporates substantial international and foreign language content into baccalaureate degree program;
(3) Makes training available predominantly to undergraduate students; and
(4) Engages in research, curriculum development, and community outreach.
An institution that wishes to apply for a grant under this part and for an allocation of fellowships under 34 CFR part 657 may submit one application for both.
(a) The Secretary evaluates an application for a comprehensive Center under the criteria contained in § 656.21, and for an undergraduate Center under the criteria contained in § 656.22.
(b) In general, the Secretary awards up to 155 possible points for these criteria. However, if the criterion in § 656.21(j) or § 656.22(j) is used, the Secretary awards up to 165 possible points. The maximum possible points for each criterion are shown in parentheses.
The Secretary uses the following criteria in evaluating an application for a comprehensive Center:
(a)
(1) The extent to which the activities for which the applicant seeks funding are of high quality and directly related to the purpose of the National Resource Centers Program (5 points);
(2) The extent to which the applicant provides a development plan or timeline demonstrating how the proposed activities will contribute to a strengthened program and whether the applicant uses its resources and personnel effectively to achieve the proposed objectives (5 points);
(3) The extent to which the costs of the proposed activities are reasonable in relation to the objectives of the program (5 points); and
(4) The long-term impact of the proposed activities on the institution's undergraduate, graduate, and professional training programs (5 points).
(b)
(1) The extent to which teaching faculty and other staff are qualified for the current and proposed Center activities and training programs, are provided professional development opportunities (including overseas experience), and participate in teaching, supervising, and advising students (10 points);
(2) The adequacy of Center staffing and oversight arrangements, including outreach and administration and the extent to which faculty from a variety of departments, professional schools, and the library are involved (5 points); and
(3) The extent to which the applicant, as part of its nondiscriminatory employment practices, encourages applications for employment from persons who are members of groups that have been traditionally underrepresented, such as members of racial or ethnic minority groups, women, persons with disabilities, and the elderly (5 points).
(c)
(1) The extent to which the Center's activities and training programs have a significant impact on the university, community, region, and the Nation as shown through indices such as enrollments, graduate placement data, participation rates for events, and usage
(2) The extent to which the applicant provides an evaluation plan that is comprehensive and objective and that will produce quantifiable, outcome-measure-oriented data; and the extent to which recent evaluations have been used to improve the applicant's program (10 points).
(d)
(e)
(1) The strength of the institution's library holdings (both print and non-print, English and foreign language) in the subject area and at the educational levels (graduate, professional, undergraduate) on which the Center focuses; and the extent to which the institution provides financial support for the acquisition of library materials and for library staff in the subject area of the Center (10 points); and
(2) The extent to which research materials at other institutions are available to students through cooperative arrangements with other libraries or on-line databases and the extent to which teachers, students, and faculty from other institutions are able to access the library's holdings (5 points).
(f)
(1) The quality and extent of the Center's course offerings in a variety of disciplines, including the extent to which courses in the Center's subject matter are available in the institution's professional schools (5 points);
(2) The extent to which the Center offers depth of specialized course coverage in one or more disciplines of the Center's subject area (5 points);
(3) The extent to which the institution employs a sufficient number of teaching faculty to enable the Center to carry out its purposes and the extent to which instructional assistants are provided with pedagogy training (5 points); and
(4) The extent to which interdisciplinary courses are offered for undergraduate and graduate students (5 points).
(g)
(1) The extent to which the Center provides instruction in the languages of the Center's subject area and the extent to which students enroll in the study of the languages of the subject area through programs or instruction offered by the Center or other providers (5 points);
(2) The extent to which the Center provides three or more levels of language training and the extent to which courses in disciplines other than language, linguistics, and literature are offered in appropriate foreign languages (5 points);
(3) Whether sufficient numbers of language faculty are available to teach the languages and levels of instruction described in the application and the extent to which language teaching staff (including faculty and instructional assistants) have been exposed to current language pedagogy training appropriate for performance-based teaching (5 points); and
(4) The quality of the language program as measured by the performance-based instruction being used or developed, the adequacy of resources for language teaching and practice, and language proficiency requirements (5 points).
(h)
(1) The extent to which the Center's curriculum has incorporated undergraduate instruction in the applicant's
(2) The extent to which the Center's curriculum provides training options for graduate students from a variety of disciplines and professional fields and the extent to which these programs and their requirements (including language requirements) are appropriate for a Center in this subject area and result in graduate training programs of high quality (5 points); and
(3) The extent to which the Center provides academic and career advising services for students; the extent to which the Center has established formal arrangements for students to conduct research or study abroad and the extent to which these arrangements are used; and the extent to which the institution facilitates student access to other institutions’ study abroad and summer language programs (5 points).
(i)
(1) Elementary and secondary schools (5 points);
(2) Postsecondary institutions (5 points); and
(3) Business, media, and the general public (5 points).
(j)
The Secretary uses the following criteria in evaluating an application for an undergraduate Center:
(a)
(1) The extent to which the activities for which the applicant seeks funding are of high quality and directly related to the purpose of the National Resource Centers Program (5 points);
(2) The extent to which the applicant provides a development plan or timeline demonstrating how the proposed activities will contribute to a strengthened program and whether the applicant uses its resources and personnel effectively to achieve the proposed objectives (5 points);
(3) The extent to which the costs of the proposed activities are reasonable in relation to the objectives of the program (5 points); and
(4) The long-term impact of the proposed activities on the institution's undergraduate training program (5 points).
(b)
(1) The extent to which teaching faculty and other staff are qualified for the current and proposed Center activities and training programs, are provided professional development opportunities (including overseas experience), and participate in teaching, supervising, and advising students (10 points);
(2) The adequacy of Center staffing and oversight arrangements, including outreach and administration and the extent to which faculty from a variety of departments, professional schools, and the library are involved (5 points); and
(3) The extent to which the applicant, as part of its nondiscriminatory employment practices, encourages applications for employment from persons who are members of groups that have been traditionally underrepresented,
(c)
(1) The extent to which the Center's activities and training programs have a significant impact on the university, community, region, and the Nation as shown through indices such as enrollments, graduate placement data, participation rates for events, and usage of Center resources; the extent to which students matriculate into advanced language and area or international studies programs or related professional programs; and the extent to which the applicant supplies a clear description of how the applicant will provide equal access and treatment of eligible project participants who are members of groups that have been traditionally underrepresented, such as members of racial or ethnic minority groups, women, persons with disabilities, and the elderly (10 points); and
(2) The extent to which the applicant provides an evaluation plan that is comprehensive and objective and that will produce quantifiable, outcome-measure-oriented data; and the extent to which recent evaluations have been used to improve the applicant's program (10 points).
(d)
(e)
(1) The strength of the institution's library holdings (both print and non-print, English and foreign language) in the subject area and at the educational levels (graduate, professional, undergraduate) on which the Center focuses; and the extent to which the institution provides financial support for the acquisition of library materials and for library staff in the subject area of the Center (10 points); and
(2) The extent to which research materials at other institutions are available to students through cooperative arrangements with other libraries or on-line databases and the extent to which teachers, students, and faculty from other institutions are able to access the library's holdings (5 points).
(f)
(1) The quality and extent of the Center's course offerings in a variety of disciplines (5 points);
(2) The extent to which the Center offers depth of specialized course coverage in one or more disciplines of the Center's subject area (5 points);
(3) The extent to which the institution employs a sufficient number of teaching faculty to enable the Center to carry out its purposes and the extent to which instructional assistants are provided with pedagogy training (5 points); and
(4) The extent to which interdisciplinary courses are offered for undergraduate students (5 points).
(g)
(1) The extent to which the Center provides instruction in the languages of the Center's subject area and the extent to which students enroll in the study of the languages of the subject area through programs offered by the Center or other providers (5 points);
(2) The extent to which the Center provides three or more levels of language training and the extent to which courses in disciplines other than language, linguistics, and literature are offered in appropriate foreign languages (5 points);
(3) Whether sufficient numbers of language faculty are available to teach the languages and levels of instruction described in the application and the extent to which language teaching staff (including faculty and instructional assistants) have been exposed to current language pedagogy training appropriate for performance-based teaching (5 points); and
(4) The quality of the language program as measured by the performance-based instruction being used or developed, the adequacy of resources for language teaching and practice, and language proficiency requirements (5 points).
(h)
(1) The extent to which the Center's curriculum has incorporated undergraduate instruction in the applicant's area or topic of specialization into baccalaureate degree programs (for example, major, minor, or certificate programs) and the extent to which these programs and their requirements (including language requirements) are appropriate for a Center in this subject area and will result in an undergraduate training program of high quality (10 points); and
(2) The extent to which the Center provides academic and career advising services for students; the extent to which the Center has established formal arrangements for students to conduct research or study abroad and the extent to which these arrangements are used; and the extent to which the institution facilitates student access to other institutions’ study abroad and summer language programs (5 points).
(i)
(1) Elementary and secondary schools (5 points);
(2) Postsecondary institutions (5 points); and
(3) Business, media and the general public (5 points).
(j)
(a) The Secretary may select one or more of the following funding priorities:
(1) Specific countries or world areas, such as, for example, East Asia, Africa, or the Middle East.
(2) Specific focus of a Center, such as, for example, a single world area; international studies; a particular issue or topic, e.g., business, development issues, or energy; or any combination.
(3) Level or intensiveness of language instruction, such as intermediate or advanced language instruction, or instruction at an intensity of 10 contact hours or more per week.
(4) Types of activities to be carried out, for example, cooperative summer intensive language programs, course development, or teacher training activities.
(b) The Secretary may select one or more of the activities listed in § 656.5 as a funding priority.
(c) The Secretary announces any priorities in the application notice published in the
(a)
(1) Faculty and staff salaries and travel;
(2) Library acquisitions;
(3) Teaching and research materials;
(4) Curriculum planning and development;
(5) Bringing visiting scholars and faculty to the Center to teach, conduct research, or participate in conferences or workshops;
(6) Training and improvement of staff;
(7) Projects conducted in cooperation with other centers addressing themes
(8) Summer institutes in the United States or abroad designed to provide language and area training in the Center's field or topic.
(b)
(1) Equipment costs exceeding 10 percent of the grant are not allowable.
(2) Funds for undergraduate travel are allowable only in conjunction with a formal program of supervised study in the subject area on which the Center focuses.
(3) Grant funds may not be used to supplant funds normally used by applicants for purposes of this part.
20 U.S.C. 1122, unless otherwise noted.
Under the Foreign Language and Area Studies Fellowships Program, the Secretary awards fellowships, through institutions of higher education, to students who are—
(a) Enrolled for graduate training in a Center or program approved by the Secretary under this part; and
(b) Undergoing performance-based modern foreign language training or training in a program for which performance-based modern foreign language instruction is being developed, in combination with area studies, international studies, or the international aspects of professional studies.
(a) The Secretary awards an allocation of fellowships to an institution of higher education or to a combination of institutions of higher education that—
(1) Operates a Center or program approved by the Secretary under this part;
(2) Teaches modern foreign languages under a program described in paragraph (b) of this section; and
(3) In combination with the teaching described in paragraph (a)(2) of this section—
(i) Provides instruction in the disciplines needed for a full understanding of the area, regions, or countries in
(ii) Conducts training and research in international studies, the international aspects of professional and other fields of study, or issues in world affairs that concern one or more countries.
(b) In teaching those modern foreign languages for which an allocation of fellowships is made available, the institution must be either using a program of performance-based training or developing a performance-based training program.
(c) The Secretary uses the criteria in § 657.21 both to approve Centers and programs for the purpose of receiving an allocation of fellowships and to evaluate applications for an allocation of fellowships.
(d) An institution does not need to receive a grant under the National Resource Center Program (34 CFR part 656) to receive an allocation of fellowships under this part.
A student is eligible to receive a fellowship if the student—
(a)(1) Is a citizen or national of the United States; or
(2) Is a permanent resident of the United States;
(b) Is accepted for enrollment or is enrolled—
(1) In an institution receiving an allocation of fellowships; and
(2) In a program that combines modern foreign language training with—
(i) Area or international studies; or
(ii) Research and training in the international aspects of professional and other fields of study;
(c) Shows potential for high academic achievement based on such indices as grade point average, class ranking, or similar measures that the institution may determine; and
(d) Is enrolled in a program of modern foreign language training in a language for which the institution has developed or is developing performance-based instruction.
The following regulations apply to this program:
(a) The regulations in 34 CFR part 655.
(b) The regulations in this part 657.
The following definitions apply to this part:
(a) The definitions in 34 CFR 655.4.
(b)
(c)
(d)
(e)
An institution that wishes to apply for an allocation of fellowships and for a grant to operate a Center under 34 CFR part 656 may submit a combined application for both grants to the Secretary.
(a) A student shall apply for a fellowship directly to an institution of higher education that has received an allocation of fellowships.
(b) The applicant shall provide sufficient information to enable the institution to determine whether he or she is eligible to receive a fellowship and
(a) The Secretary evaluates an application for an allocation of fellowships on the basis of the quality of the applicant's Center or program. The applicant's Center or program is evaluated and approved under the criteria in § 657.21.
(b) In general, the Secretary awards up to 140 possible points for these criteria. However, if priority criteria are used, the Secretary awards up to 150 possible points. The maximum possible points for each criterion are shown in parentheses.
(a)
(b)
(1) The extent to which teaching faculty and other staff are qualified for the current and proposed activities and training programs, are provided professional development opportunities (including overseas experience), and participate in teaching, supervising, and advising students (5 points);
(2) The adequacy of applicant staffing and oversight arrangements and the extent to which faculty from a variety of departments, professional schools, and the library are involved (5 points); and
(3) The extent to which the applicant, as part of its nondiscriminatory employment practices, encourages applications for employment from persons who are members of groups that have been traditionally underrepresented, such as members of racial or ethnic minority groups, women, persons with disabilities, and the elderly (5 points).
(c)
(1) The extent to which the applicant's activities and training programs have contributed to an improved supply of specialists on the program's subject as shown through indices such as graduate enrollments and placement data; and the extent to which the applicant supplies a clear description of how the applicant will provide equal access and treatment of eligible project participants who are members of groups that have been traditionally underrepresented, such as members of racial or ethnic minority groups, women, persons with disabilities, and the elderly (15 points); and
(2) The extent to which the applicant provides an evaluation plan that is comprehensive and objective and that will produce quantifiable, outcome-measure-oriented data; and the extent to which recent evaluations have been used to improve the applicant's program (5 points).
(d)
(1) The extent to which the institution provides financial and other support to the operation of the applicant, teaching staff for the applicant's subject area, library resources, and linkages with institutions abroad (5 points); and
(2) The extent to which the institution provides financial support to graduate students in fields related to the applicant's teaching program (5 points).
(e)
(1) The strength of the institution's library holdings (both print and non-
(2) The extent to which research materials at other institutions are available to students through cooperative arrangements with other libraries or on-line databases (5 points).
(f)
(1) The quality and extent of the applicant's course offerings in a variety of disciplines, including the extent to which courses in the applicant's subject matter are available in the institution's professional schools (10 points);
(2) The extent to which the applicant offers depth of specialized course coverage in one or more disciplines on the applicant's subject area (5 points);
(3) The extent to which the institution employs a sufficient number of teaching faculty to enable the applicant to carry out its purposes and the extent to which instructional assistants are provided with pedagogy training (5 points); and
(4) The extent to which interdisciplinary courses are offered for graduate students (5 points).
(g)
(1) The extent to which the applicant provides instruction in the languages of the applicant's subject area and the extent to which students enroll in the study of the languages of the subject area through programs or instruction offered by the applicant or other providers (5 points);
(2) The extent to which the applicant provides three or more levels of language training and the extent to which courses in disciplines other than language, linguistics, and literature are offered in appropriate foreign languages (5 points);
(3) Whether sufficient numbers of language faculty are available to teach the languages and levels of instruction described in the application and the extent to which language teaching staff (including faculty and instructional assistants) have been exposed to current language pedagogy training appropriate for performance-based teaching (5 points); and
(4) The quality of the language program as measured by the performance-based instruction being used or developed, the adequacy of resources for language teaching and practice, and language proficiency requirements (5 points).
(h)
(1) The extent to which the applicant's curriculum provides training options for graduate students from a variety of disciplines and professional fields and the extent to which these programs and their requirements (including language requirements) are appropriate for an applicant in this subject area and result in graduate training programs of high quality (10 points);
(2) The extent to which the applicant provides academic and career advising services for students (5 points); and
(3) The extent to which the applicant has established formal arrangements for students to conduct research or study abroad and the extent to which these arrangements are used; and the extent to which the institution facilitates student access to other institutions’ study abroad and summer language programs (5 points).
(i)
(a) The Secretary may establish one or more of the following priorities for the allocation of fellowships:
(1) Specific world areas, or countries, such as East Asia or Mexico.
(2) Languages, such as Chinese.
(3) Levels of language offerings.
(4) Academic disciplines, such as linguistics or sociology.
(5) Professional studies, such as business, law, or education;
(6) Particular subjects, such as population growth and planning, or international trade and business.
(7) A combination of any of these categories.
(b) The Secretary announces any priorities in the application notice published in the
(a)
(1) One academic year; or
(2) One summer session if the summer session provides the fellow with the equivalent of one academic year of modern foreign language study.
(b)
(1) The student meets the eligibility requirements in § 657.3; and
(2) The remaining fellowship period comprises at least one full academic quarter, semester, trimester, or summer session as described in paragraph (a)(2) of this section.
(a)(1) An institution shall award a stipend to fellowship recipients.
(2) Each fellowship includes an institutional payment and a subsistence allowance to be determined by the Secretary.
(3) If the institutional payment determined by the Secretary is greater than the tuition and fees charged by the institution, the institutional payment portion of the fellowship is limited to actual tuition and fees. The difference between actual tuition and fees and the Secretary's institutional payment shall be used to fund additional fellowships to the extent that funds are available for a full subsistence allowance.
(4) If permitted by the Secretary, the fellowship may include an allowance for travel and an allowance for dependents.
(b) The Secretary announces in an application notice published in the
(1) The amounts of the subsistence allowance and the institutional payment for an academic year and the subsistence allowance and the institutional payment for a summer session;
(2) Whether travel and dependents’ allowances will be permitted; and
(3) The amount of travel and dependents’ allowances.
(a) An institution shall pay a fellow his or her subsistence and any other allowance in installments during the term of the fellowship.
(b) An institution shall make a payment only to a fellow who is in good standing and is making satisfactory progress.
(c) The institution shall make appropriate adjustments of any overpayment or underpayment to a fellow.
(d) Funds not used by one recipient for reasons of withdrawal are to be used for alternate recipients to the extent that funds are available for a full subsistence allowance.
(a) Before awarding a fellowship for use outside the United States, an institution shall obtain the approval of the Secretary.
(b) The Secretary may approve the use of a fellowship outside the United States if the student is—
(1) Enrolled in an overseas foreign language program approved by the institution at which the student is enrolled in the United States for study at
(2) Engaged during the academic year in research that cannot be done effectively in the United States and is affiliated with an institution of higher education or other appropriate organization in the host country.
An institution shall terminate a fellowship if—
(a) The fellow is not making satisfactory progress, is no longer enrolled, or is no longer in good standing at the institution; or
(b) The fellow fails to follow the course of study, including modern foreign language study, for which he or she applied, unless a revised course of study is otherwise approvable under this part.
20 U.S.C. 1124, unless otherwise noted.
The Undergraduate International Studies and Foreign Language Program is designed to provide assistance to institutions of higher education, combinations of those institutions, or partnerships between nonprofit educational organizations and institutions of higher education, to assist those institutions, combinations, or partnerships in planning, developing, and carrying out programs to improve undergraduate instruction in international studies and foreign languages.
The following are eligible to apply for assistance under this part:
(a) Institutions of higher education.
(b) Combinations of institutions of higher education.
(c) Partnerships between nonprofit educational organizations and institutions of higher education.
(d) Public and private nonprofit agencies and organizations, including professional and scholarly associations.
The following regulations apply to this program:
(a) The regulations in 34 CFR part 655.
(b) The regulations in this part 658.
The definitions in 34 CFR 655.4 apply to this program.
(a) The Secretary may provide assistance to an institution of higher education, a combination of institutions of higher education, or a partnership between a nonprofit educational organization and an institution of higher education to plan, develop, and carry out a program to improve undergraduate instruction in international studies and foreign languages. Those grants must be awarded to institutions, combinations, or partnerships seeking to create new programs or to strengthen existing programs in foreign languages, area studies, and other international fields.
(b) The Secretary gives consideration to an applicant that proposes a program that—
(1) Initiates new or revised courses in international or area studies;
(2) Makes instruction in foreign languages available to students in the program; and
(3) Takes place primarily in the United States.
(c) The program shall focus on—
(1) International or global studies;
(2) One or more world areas and their languages; or
(3) Issues or topics, such as international environmental studies or international health.
The Secretary awards grants under this part to assist in carrying out projects and activities that are an integral part of a program to improve undergraduate instruction in international studies and foreign languages. These include projects such as—
(a) Planning for the development and expansion of undergraduate programs in international studies and foreign languages;
(b) Teaching, research, curriculum development, faculty training in the United States or abroad, and other related activities, including—
(1) Expanding library and teaching resources;
(2) Conducting faculty workshops, conferences, and special lectures;
(3) Developing and testing new curricular materials, including self-instructional materials in foreign languages, or specialized language materials dealing with a particular subject (such as health or the environment);
(4) Initiating new and revised courses in international studies or area studies and foreign languages; and
(5) Conducting preservice and inservice teacher training;
(c) Expanding the opportunities for learning foreign languages, including less commonly taught languages;
(d) Providing opportunities for which foreign faculty and scholars may visit institutions as visiting faculty;
(e) Placing U.S. faculty members in internships with international associations or with governmental or nongovernmental organizations in the U.S. or abroad to improve their understanding of international affairs;
(f) Developing international education programs designed to develop or enhance linkages between 2-and 4-year institutions of higher education, or baccalaureate and post-baccalaureate programs or institutions;
(g) Developing undergraduate educational programs—
(1) In locations abroad where those opportunities are not otherwise available or that serve students for whom those opportunities are not otherwise available; and
(2) That provide courses that are closely related to on-campus foreign language and international curricula;
(h) Integrating new and continuing education abroad opportunities for undergraduate students into curricula of specific degree programs;
(i) Developing model programs to enrich or enhance the effectiveness of educational programs abroad, including pre-departure and post-return programs, and integrating educational programs abroad into the curriculum of the home institution;
(j) Developing programs designed to integrate professional and technical education with foreign languages, area studies, and other international fields;
(k) Establishing linkages overseas with institutions of higher education and organizations that contribute to the educational programs assisted under this part;
(l) Developing partnerships between—
(1) Institutions of higher education; and
(2) The private sector, government, or elementary and secondary education institutions in order to enhance international knowledge and skills; and
(m) Using innovative technology to increase access to international education programs.
The Secretary may award grants under this part to public and private nonprofit agencies and organizations including scholarly associations, that propose projects that will make an especially significant contribution to strengthening and improving undergraduate instruction in international studies and foreign languages at institutions of higher education.
(a)(1) The Secretary evaluates an application from an institution of higher education or a combination of such institutions on the basis of the criteria in §§ 658.31 and 658.32. The Secretary awards up to 85 possible points for these criteria.
(2) Under §§ 658.31 and 658.32 the Secretary evaluates applications for funding on a percentage score based upon the number of points an application receives and the maximum number of points possible.
(b)(1) The Secretary evaluates an application from an agency or organization or professional or scholarly association on the basis of the criteria in §§ 658.31 and 658.33. The Secretary awards up to 75 possible points for these criteria.
(2) Under §§ 658.31 and 658.33 the Secretary evaluates applications for funding on a percentage score based upon the number of points an application receives and the maximum number of points possible.
(c) The maximum possible points for each criterion are indicated in parentheses.
The Secretary uses the following criteria in evaluating an application for a project under this part.
(a)
(b)
(c)
(d)
(e)
In addition to the criteria referred to in § 658.31, the Secretary applies the following criteria to applications submitted by an institution of higher education or a combination of such institutions:
(a)
(1) The Secretary reviews each application for information that shows the applicant's commitment to the international studies program.
(2) The Secretary looks for information that shows—
(i) The institution's current strength as measured by the number of international studies courses offered;
(ii) The extent to which planning for the implementation of the proposed program has involved the applicant's faculty, as well as administrators;
(iii) The institutional commitment to the establishment, operation, and continuation of the program as demonstrated by optimal use of available personnel and other resources; and
(iv) The institutional commitment to the program as demonstrated by the use of institutional funds in support of the program's objectives.
(b)
(1) The Secretary reviews each application for information that shows the nature of the applicant's proposed international studies program.
(2) The Secretary looks for information that shows—
(i) The extent to which the proposed activities will contribute to the implementation of a program in international studies and foreign languages at the applicant institution;
(ii) The interdisciplinary aspects of the program;
(iii) The number of new and revised courses with an international perspective that will be added to the institution's programs; and
(iv) The applicant's plans to improve or expand language instruction.
(c)
(1) The Secretary reviews each application for information that shows the need for and the prospective results of the applicant's proposed program.
(2) The Secretary looks for information that shows—
(i) The extent to which the proposed activities are needed at the applicant institution;
(ii) The extent to which the proposed use of Federal funds will result in the implementation of a program in international studies and foreign languages at the applicant institution;
(iii) The likelihood that the activities initiated with Federal funds will be continued after Federal assistance is terminated; and
(iv) The adequacy of the provisions for sharing the materials and results of the program with other institutions of higher education.
In addition to the criteria referred to in § 658.31, the Secretary applies the following criterion to applications from organizations and associations:
(a) Need for and potential impact of the proposed project in improving international studies and the study of modern foreign language at the undergraduate level. (30)
(b) The Secretary reviews each application for information that shows the need for and the potential impact of the applicant's proposed projects in improving international studies and the study of modern foreign language at the undergraduate level.
(1) The Secretary looks for information that shows—
(i) The extent to which the applicant's proposed apportionment of Federal funds among the various budget categories for the proposed project will contribute to achieving results;
(ii) The international nature and contemporary relevance of the proposed project;
(iii) The extent to which the proposed project will make an especially significant contribution to the improvement of the teaching of international studies or modern foreign languages at the undergraduate level; and
(iv) The adequacy of the applicant's provisions for sharing the materials and results of the proposed project with the higher education community.
(2) [Reserved]
In addition to applying the selection criteria in, as appropriate §§ 658.31, 658.32, and 658.33, the Secretary, to the extent practicable and consistent with the criterion of excellence, seeks to encourage diversity by ensuring that a variety of types of projects and institutions receive funding.
(a) The Secretary gives priority to applications from institutions of higher education or combinations of these institutions that require entering students to have successfully completed at least two years of secondary school foreign language instruction or that require each graduating student to earn two years of postsecondary credit in a foreign language (or have demonstrated equivalent competence in the foreign language) or, in the case of a 2-year degree granting institution, offer two years of postsecondary credit in a foreign language.
(b) The Secretary announces the number of points to be awarded under this priority in the application notice published in the
Equipment costs may not exceed five percent of the grant amount.
(a) The grantee's share may be derived from cash contributions from private sector corporations or foundations in the amount of one-third of the total cost of the project.
(b) The grantee's share may be derived from cash or in-kind contributions from institutional and noninstitutional funds, including State and private sector corporation or foundation contributions, equal to one-half of the total cost of the project.
(c) In-kind contributions means property or services that benefit a grant-supported project or program and that are contributed by non-Federal third parties without charge to the grantee.
(d) The Secretary may waive or reduce the required non-Federal share for institutions that—
(1) Are eligible to receive assistance under part A or B of title III or under title V of the Higher Education Act of 1965, as amended; and
(2) Have submitted a grant application under this part.
20 U.S.C. 1125, unless otherwise noted.
The Secretary may, directly or through grants or contracts, conduct research and studies which contribute to the purposes of the International Education Program authorized by part A of title VI of the Higher Education Act of 1965, as amended (HEA). The research and studies may include, but are not limited to—
(a) Studies and surveys to determine needs for increased or improved instruction in modern foreign languages, area studies, or other international fields, including the demand for foreign language, area, and other international specialists in government, education, and the private sector;
(b) Research on more effective methods of providing instruction and achieving competency in foreign languages, area studies, or other international fields;
(c) Research on applying performance tests and standards across all areas of foreign language instruction and classroom use;
(d) Developing and publishing specialized materials for use in foreign language, area studies, and other international fields or for training foreign language, area, and other international specialists;
(e) Studies and surveys to assess the use of graduates of programs supported under title VI of the HEA by governmental, educational, and private-sector organizations and other studies assessing the outcomes and effectiveness of supported programs;
(f) Comparative studies of the effectiveness of strategies to provide international capabilities at institutions of higher education;
(g) Evaluations of the extent to which programs assisted under title VI of the HEA that address national needs would not otherwise be offered;
(h) Studies and surveys of the use of technologies in foreign language, area studies, and international studies programs; and
(i) Studies and evaluations of effective practices in the dissemination of international information, materials, research, teaching strategies, and testing techniques throughout the educational community, including elementary and secondary schools.
Public and private agencies, organizations, and institutions, and individuals are eligible to apply for grants under this part.
The following regulations apply to this program:
(a) The regulations in 34 CFR part 655.
(b) The regulations in this part 660.
The definitions in 34 CFR 655.4 apply to this program.
An applicant may apply for funds to carry out any of the following types of activities:
(a) Studies and surveys to determine the need for increased or improved instruction in—
(1) Modern foreign languages; and
(2) Area studies and other international fields needed to provide full understanding of the places in which those languages are commonly used.
(b) Research and studies—
(1) On more effective methods of instruction and achieving competency in modern foreign languages, area studies, or other international fields;
(2) To evaluate competency in those foreign languages, area studies, or other international fields; or
(3) On the application of performance tests and standards across all areas of foreign language instruction and classroom use.
(c) The development and publication of specialized materials—
(1) For use by students and teachers of modern foreign languages, area studies, and other international fields; and
(2) For use in—
(i) Providing such instruction and evaluation; or
(ii) Training individuals to provide such instruction and evaluation.
(d) Research, surveys, studies, or the development of instructional materials that serve to enhance international understanding.
(e) Other research or material development projects that further the purposes of the International Education Program authorized by part A of title VI of the HEA.
(f) Studies and surveys to assess the use of graduates of programs supported under title VI of the HEA by governmental, educational, and private-sector organizations, and other studies assessing the outcomes and effectiveness of supported programs.
(g) Comparative studies of the effectiveness of strategies to provide international capabilities at institutions of higher education.
(h) Evaluations of the extent to which programs assisted under title VI of the HEA that address national needs would not otherwise be offered.
(i) Studies and surveys of the uses of technology in foreign language, area studies, and international studies programs.
(j) Studies and evaluations of effective practices in the dissemination of international information, materials, research, teaching strategies, and testing techniques through the education community, including elementary and secondary schools.
(a) The Secretary evaluates an application for a research project, a study, or a survey on the basis of the criteria in §§ 660.31 and 660.32.
(b) The Secretary evaluates an application for the development of specialized instructional materials on the basis of the criteria in §§ 660.31 and 660.33
(c) The Secretary awards up to 100 possible points for these criteria. The maximum possible points for each criterion are shown in parentheses.
The Secretary uses the following criteria in evaluating applications for research or studies projects:
(a)
(b)
(c)
(d)
(e)
In addition to the criteria referred to in § 660.31, the Secretary applies the following criteria to an application for a research project, study, or survey:
(a)
(1) A need for the proposed project in the field of study on which the project focuses; and
(2) That the proposed project will provide information about the present and future needs of the United States for study in foreign language and other international fields.
(b)
(c)
(d)
(1) Are well formulated; and
(2) Reflect adequate knowledge of related research.
(e)
(f)
(1) The adequacy of the proposed teaching, testing, and research methodology; and
(2) The size, scope, and duration of the proposed project.
In addition to the criteria referred to in § 660.31, the Secretary applies the following criteria to an application for assistance to develop specialized instructional materials.
(a)
(1) The proposed materials are needed in the educational field of study on which the project focuses; and
(2) The language or languages, the area, region, or country, or the issues or studies for which the materials are to be developed, are of sufficient priority and significance to the national interest to warrant financial support by the Federal Government.
(b)
(c)
(1) All existing related or similar materials have been accounted for and the critical commentary on their adequacy is appropriate and accurate; and
(2) The proposed materials will not duplicate any existing adequate materials.
(d)
(e)
(f)
(g)
(1) Pretesting the proposed materials; and
(2) If necessary, revising the proposed materials before publication.
(a) The Secretary may each year select for funding from among the following priorities:
(1) Categories of eligible projects described in § 660.10.
(2) Specific languages or regions for study or materials development; for example, the Near or Middle East, South Asia, Southeast Asia, Eastern Europe, Inner Asia, the Far East, Africa or Latin America, or the languages of those regions.
(3) Topics of research and studies; for example, language acquisition processes, methodology of foreign language instruction, foreign language performance testing, or assessments of resources and needs.
(4) Levels of education; for example, elementary, secondary, postsecondary or university-level education, or teacher education.
(b) The Secretary announces any priorities in the application notice published in the
Funds awarded under this part may not be used for the training of students and teachers.
20 U.S.C. 1130-1130b, unless otherwise noted.
The Business and International Education Program is designed to promote linkages between institutions of higher education and American businesses engaged in international economic activities. The purpose of each project assisted under this part is both to enhance the international academic programs of institutions of higher education, and to provide appropriate services to the business community that will enable it to expand its capacity to sell its goods and services outside the United States.
Under this program the Secretary considers applications from institutions of higher education that have entered into agreements with business enterprises, trade organizations or associations engaged in international economic activity—or a combination or consortium of these enterprises, organizations or associations—for the purposes of pursuing the activities authorized under this program.
The following regulations apply to this program:
(a) The regulations in 34 CFR part 655.
(b) The regulations in this part 661.
(a)
(b)
Combinations of institutions
Institution of higher education
The activities that the Secretary may assist institutions of higher education to conduct under this program, include but are not limited to—
(a) Innovation and improvement of international education curricula to serve the needs of the business community, including the development of new programs for nontraditional, mid-career, or part-time students;
(b) Development of programs to inform the public of increasing international economic interdependence and the role of American business within the international economic system;
(c) Internationalization of curricula at junior and community colleges, and at undergraduate and graduate schools of business;
(d) Development of area studies programs and interdisciplinary international programs;
(e) Establishment of export education programs through cooperative arrangements with regional and world trade centers and councils, and with bilateral and multilateral trade associations;
(f) Research for and development of teaching materials relating to international education, including language materials, and facilities appropriate to business-oriented students;
(g) Establishment of student and faculty fellowships and internships for training and education in international business activities;
(h) Development of opportunities for business and other professional school junior faculty to acquire or strengthen international skills and perspectives;
(i) Development of research programs on issues of common interest to institutions of higher education and private sector organizations and associations engaged in or promoting international economic activity;
(j) The establishment of internships overseas to enable foreign language students to develop their foreign language skills and their knowledge of foreign cultures and societies;
(k) Establishing linkages overseas with institutions of higher education and organizations that contribute to the educational objectives of this program; and
(l) Summer institutes in international business, foreign area, and other international studies designed to carry out the purposes of this program.
An institution that applies for a grant under this program shall include the following in its application:
(a)(1) A copy of the agreement between the applicant and the other party or parties described in § 661.2 for the purpose of carrying out the activities for which the applicant seeks assistance.
(2) The agreement must be signed by all parties and it must describe the manner in which the business enterprise, trade association, or organization will assist in carrying out the activities proposed in the application.
(b) An assurance that the applicant will use the funds to supplement and not to supplant activities conducted by the applicant.
(a) The Secretary evaluates an application for a grant under this program on the basis of the criteria in § 661.31.
(b) The Secretary awards up to 100 possible points for these criteria. The maximum possible points for each criterion are shown in parentheses.
The Secretary uses the following criteria to evaluate applications for a grant under this program.
(a)
(b)
(c)
(d)
(e)
(f)
(a) The Secretary may each year establish priorities for funding from the activities described in § 661.10.
(b) The Secretary announces any priorities in the application notice published in the
A grantee shall pay a minimum of 50 percent of the cost of the project for each fiscal year.
Section 102(b)(6) of the Mutual Educational and Cultural Exchange Act of 1961 (Fulbright-Hays Act), 22 U.S.C. 2452(b)(6), unless otherwise noted.
(a) The Fulbright-Hays Doctoral Dissertation Research Abroad Fellowship Program is designed to contribute to the development and improvement of the study of modern foreign languages and area studies in the United States by providing opportunities for scholars to conduct research abroad.
(b) Under the program, the Secretary awards fellowships, through institutions of higher education, to doctoral candidates who propose to conduct dissertation research abroad in modern foreign languages and area studies.
An institution of higher education is eligible to receive an institutional grant.
An individual is eligible to receive a fellowship if the individual—
(a)(1) Is a citizen or national of the United States; or
(2) Is a permanent resident of the United States;
(b)(1) Is a graduate student in good standing at an institution of higher education; and
(2) When the fellowship period begins, is admitted to candidacy in a doctoral degree program in modern foreign languages and area studies at that institution;
(c) Is planning a teaching career in the United States upon completion of his or her doctoral program; and
(d) Possesses sufficient foreign language skills to carry out the dissertation research project.
(a) The Secretary pays—
(1) Travel expenses to and from the residence of the fellow and the country or countries of research;
(2) A maintenance stipend for the fellow and his or her dependents related to cost of living in the host country or countries;
(3) An allowance for research-related expenses overseas, such as books, copying, tuition and affiliation fees, local travel, and other incidental expenses; and
(4) Health and accident insurance premiums.
(b) In addition, the Secretary may pay—
(1) Emergency medical expenses not covered by health and accident insurance; and
(2) The costs of preparing and transporting the remains of a fellow or dependent who dies during the term of the fellowship to his or her former home.
(c) The Secretary announces the amount of benefits expected to be available in an application notice published in the
(a) A fellowship is for a period of not fewer than six nor more than twelve months.
(b) A fellowship may not be renewed.
The following regulations apply to this program:
(a) The regulations in this part 662; and
(b) The Education Department General Administrative Regulations (EDGAR) (34 CFR parts 74, 75, 77, 81, 82, 85, and 86).
(a) Definitions of the following terms as used in this part are contained in 34 CFR part 77:
(b) The definition of
(c) The following definitions of other terms used in this part apply to this program:
(1) The recipient's spouse.
(2) The recipient's or spouse's children who are unmarried and under age 21.
(a) An individual applies for a fellowship by submitting an application to the Secretary through the institution
(b) The applicant shall provide sufficient information concerning his or her personal and academic background and proposed research project to enable the Secretary to determine whether the applicant—
(1) Is eligible to receive a fellowship under § 662.3; and
(2) Should be selected to receive a fellowship under subparts C and D of this part.
An institution of higher education that participates in this program is responsible for—
(a) Making fellowship application materials available to its students;
(b) Accepting and screening applications in accordance with its own technical and academic criteria; and
(c) Forwarding screened applications to the Secretary and requesting an institutional grant.
(a) The Secretary considers applications for fellowships under this program that have been screened and submitted by eligible institutions. The Secretary evaluates these applications on the basis of the criteria in § 662.21.
(b) The Secretary does not consider applications to carry out research in a country in which the United States has no diplomatic representation.
(c) In evaluating applications, the Secretary obtains the advice of panels of United States academic specialists in modern foreign languages and area studies.
(d) The Secretary gives preference to applicants who have served in the armed services of the United States if their applications are equivalent to those of other applicants on the basis of the criteria in § 662.21.
(e) The Secretary considers information on budget, political sensitivity, and feasibility from binational commissions or United States diplomatic missions, or both, in the proposed country or countries of research.
(f) The Secretary presents recommendations for recipients of fellowships to the J. William Fulbright Foreign Scholarship Board, which reviews the recommendations and approves recipients.
(a)
(2) The maximum score for all of the criteria is 100 points. However, if priority criteria described in paragraph (c) of this section are used, the maximum score is 110 points.
(3) The maximum score for each criterion is shown in parentheses with the criterion.
(b)
(1) The statement of the major hypotheses to be tested or questions to be examined, and the description and justification of the research methods to be used;
(2) The relationship of the research to the literature on the topic and to major theoretical issues in the field, and the project's originality and importance in terms of the concerns of the discipline;
(3) The preliminary research already completed in the United States and overseas or plans for such research prior to going overseas, and the kinds, quality and availability of data for the research in the host country or countries;
(4) The justification for overseas field research and preparations to establish appropriate and sufficient research contacts and affiliations abroad;
(5) The applicant's plans to share the results of the research in progress and a copy of the dissertation with scholars and officials of the host country or countries; and
(6) The guidance and supervision of the dissertation advisor or committee at all stages of the project, including guidance in developing the project, understanding research conditions abroad, and acquainting the applicant with research in the field.
(c)
(1) The overall strength of the applicant's graduate academic record; (10)
(2) The extent to which the applicant's academic record demonstrates a strength in area studies relevant to the proposed project; (10)
(3) The applicant's proficiency in one or more of the languages (other than English and the applicant's native language) of the country or countries of research, and the specific measures to be taken to overcome any anticipated language barriers; (15) and
(4) The applicant's ability to conduct research in a foreign cultural context, as evidenced by the applicant's references or previous overseas experience, or both. (5)
(d)
(2) Priorities may relate to certain world areas, countries, academic disciplines, languages, topics, or combinations of any of these categories. For example, the Secretary may establish a priority for—
(i) A specific geographic area or country, such as the Caribbean or Poland;
(ii) An academic discipline, such as economics or political science;
(iii) A language, such as Tajik or Indonesian; or
(iv) A topic, such as public health issues or the environment.
(a) The J. William Fulbright Foreign Scholarship Board selects fellows on the basis of the Secretary's recommendations and the information described in § 662.20(e) from binational commissions or United States diplomatic missions.
(b) No applicant for a fellowship may be awarded more than one graduate fellowship under the Fulbright-Hays Act from appropriations for a given fiscal year.
(a) An institution to which the Secretary awards a grant under this part is responsible for administering the grant in accordance with the regulations described in § 662.6.
(b) The institution is responsible for processing individual applications for fellowships in accordance with procedures described in § 662.11.
(c) The institution is responsible for disbursing funds in accordance with procedures described in § 662.4.
(d) The Secretary awards the institution an administrative allowance of $100 for each fellowship listed in the grant award document.
As a condition of retaining a fellowship, a fellow shall—
(a) Maintain satisfactory progress in the conduct of his or her research;
(b) Devote full time to research on the approved topic;
(c) Not engage in unauthorized income-producing activities during the period of the fellowship; and
(d) Remain a student in good standing with the grantee institution during the period of the fellowship.
(a) The fellowship may be revoked only by the J. William Fulbright Foreign Scholarship Board upon the recommendation of the Secretary.
(b) The Secretary may recommend a revocation of a fellowship on the basis of—
(1) The fellow's failure to meet any of the conditions in § 662.41; or
(2) Any violation of the standards of conduct adopted by the J. William Fulbright Foreign Scholarship Board.
Sec. 102(b)(6) of the Mutual Educational and Cultural Exchange Act of 1961 (Fulbright-Hays Act), 22 U.S.C. 2452(b)(6), unless otherwise noted.
(a) The Fulbright-Hays Faculty Research Abroad Program is designed to contribute to the development and improvement of modern foreign language and area studies in the United States by providing opportunities for scholars to conduct research abroad.
(b) Under the program, the Secretary awards fellowships, through institutions of higher education, to faculty members who propose to conduct research abroad in modern foreign languages and area studies to improve their skill in languages and knowledge of the culture of the people of these countries.
An institution of higher education is eligible to receive an institutional grant.
An individual is eligible to receive a fellowship if the individual—
(a)(1) Is a citizen or national of the United States; or
(2) Is a permanent resident of the United States;
(b) Is employed by an institution of higher education;
(c) Has been engaged in teaching relevant to his or her foreign language or area studies specialization for the two years immediately preceding the date of the award;
(d) Proposes research relevant to his or her modern foreign language or area specialization which is not dissertation research for a doctoral degree; and
(e) Possesses sufficient foreign language skills to carry out the research project.
(a) The Secretary pays—
(1) Travel expenses to and from the residence of the fellow and the country or countries of research;
(2) A maintenance stipend for the fellow related to his or her academic year salary; and
(3) An allowance for research-related expenses overseas, such as books, copying, tuition and affiliation fees, local travel, and other incidental expenses.
(b) The Secretary may pay—
(1) Emergency medical expenses not covered by the faculty member's health and accident insurance; and
(2) The costs of preparing and transporting the remains of a fellow or dependent who dies during the term of the fellowship to his or her former home.
(c) The Secretary announces the amount of benefits expected to be available in an application notice published in the
(a) A fellowship is for a period of not fewer than three nor more than twelve months.
(b) A fellowship may not be renewed.
The following regulations apply to this program:
(a) The regulations in this part 663; and
(b) The Education Department General Administrative Regulations (EDGAR) (34 CFR parts 74, 75, 77, 81, 82, 85, and 86).
(a) Definitions of the following terms as used in this part are contained in 34 CFR part 77:
(b) The definition of
(c) The following definitions of other terms used in this part apply to this program:
(1) The recipient's spouse.
(2) The recipient's or spouse's children who are unmarried and under age 21.
(a) An individual applies for a fellowship by submitting an application to the Secretary through the institution of higher education at which the individual is employed.
(b) The applicant shall provide sufficient information concerning his or her personal and academic background and proposed research project to enable the Secretary to determine whether the applicant—
(1) Is eligible to receive a fellowship under § 663.3; and
(2) Should be selected to receive a fellowship under subparts C and D of this part.
An institution of higher education that participates in this program is responsible for—
(a) Making fellowship application materials available to its faculty;
(b) Accepting and screening applications in accordance with its own technical and academic criteria; and
(c) Forwarding screened applications to the Secretary through a request for an institutional grant.
(a) The Secretary considers applications for fellowships under this program that have been screened and submitted by eligible institutions. The Secretary evaluates these applications on the basis of the criteria in § 663.21.
(b) The Secretary does not consider applications to carry out research in a country in which the United States has no diplomatic representation.
(c) In evaluating applications, the Secretary obtains the advice of panels of United States academic specialists in modern foreign languages and area studies.
(d) The Secretary gives preference to applicants who have served in the armed services of the United States if their applications are equivalent to those of other applicants on the basis of the criteria in § 663.21.
(e) The Secretary considers information on budget, political sensitivity, and feasibility from binational commissions or United States diplomatic missions, or both, in the proposed country or countries of research.
(f) The Secretary presents recommendations for recipients of fellowships to the J. William Fulbright Foreign Scholarship Board, which reviews the recommendations and approves recipients.
(a)
(2) The maximum score for all of the criteria is 100 points. However, if priority criteria described in paragraph (c) of this section are used, the maximum score is 110 points.
(3) The maximum score for each criterion is shown in parentheses with the criterion.
(b)
(1) The statement of the major hypotheses to be tested or questions to be examined, and the description and justification of the research methods to be used;
(2) The relationship of the research to the literature on the topic and to major theoretical issues in the field, and the project's importance in terms of the concerns of the discipline;
(3) The preliminary research already completed or plans for research prior to going overseas, and the kinds, quality and availability of data for the research in the host country or countries;
(4) The justification for overseas field research, and preparations to establish appropriate and sufficient research contacts and affiliations abroad;
(5) The applicant's plans to share the results of the research in progress with scholars and officials of the host country or countries and the American scholarly community; and
(6) The objectives of the project regarding the sponsoring institution's plans for developing or strengthening, or both, curricula in modern foreign languages and area studies.
(c)
(1) The overall strength of applicant's academic record (teaching, research, contributions, professional association activities); (10)
(2) The applicant's excellence as a teacher or researcher, or both, in his or her area or areas of specialization; (10)
(3) The applicant's proficiency in one or more of the languages (other than English and the applicant's native language), of the country or countries of research, and the specific measures to be taken to overcome any anticipated language barriers; (15) and
(4) The applicant's ability to conduct research in a foreign cultural context, as evidenced by the applicant's previous overseas experience, or documentation provided by the sponsoring institution, or both. (5)
(d)
(2) Priorities may relate to certain world areas, countries, academic disciplines, languages, topics, or combinations of any of these categories. For example, the Secretary may establish a priority for—
(i) A specific geographic area or country, such as East Asia or Latvia;
(ii) An academic discipline, such as history or political science;
(iii) A language, such as Hausa or Telegu; or
(iv) A topic, such as religious fundamentalism or migration.
The J. William Fulbright Foreign Scholarship Board selects fellows on the basis of the Secretary's recommendations and the information described in § 663.20(e) from binational commissions or United States diplomatic missions.
(a) An institution to which the Secretary awards a grant under this part is responsible for administering the grant in accordance with the regulations described in § 663.6.
(b) The institution is responsible for processing individual applications for fellowships in accordance with procedures described in § 663.11.
(c) The institution is responsible for disbursing funds in accordance with procedures described in § 663.4.
(d) The Secretary awards the institution an administrative allowance of $100 for each fellowship listed in the grant award document.
As a condition of retaining a fellowship, a fellow shall—
(a) Maintain satisfactory progress in the conduct of his or her research;
(b) Devote full time to research on the approved topic;
(c) Not engage in unauthorized income-producing activities during the period of the fellowship; and
(d) Remain employed by the grantee institution during the period of the fellowship.
(a) The fellowship may be revoked only by the J. William Fulbright Foreign Scholarship Board upon the recommendation of the Secretary.
(b) The Secretary may recommend a revocation of a fellowship on the basis of—
(1) The fellow's failure to meet any of the conditions in § 663.41; or
(2) Any violation of the standards of conduct adopted by the J. William Fulbright Foreign Scholarship Board.
22 U.S.C. 2452(b)(6), unless otherwise noted.
(a) The Fulbright-Hays Group Projects Abroad Program is designed to contribute to the development and improvement of the study of modern foreign languages and area studies in the United States by providing opportunities for teachers, students, and faculty to study in foreign countries.
(b) Under the program, the Secretary awards grants to eligible institutions, departments, and organizations to conduct overseas group projects in research, training, and curriculum development.
The following are eligible to apply for assistance under this part:
(a) Institutions of higher education;
(b) State departments of education;
(c) Private non-profit educational organizations; and
(d) Consortia of institutions, departments, and organizations described in paragraphs (a), (b), or (c) of this section.
An individual is eligible to participate in a Fulbright-Hays Group Projects Abroad, if the individual— (a)(1) Is a citizen or national of the United States; or
(2) Is a permanent resident of the United States; and
(b)(1) Is a faculty member who teaches modern foreign languages or area studies in an institution of higher education;
(2) Is a teacher in an elementary or secondary school;
(3) Is an experienced education administrator responsible for planning, conducting, or supervising programs in modern foreign languages or area studies at the elementary, secondary, or postsecondary level; or
(4) Is a graduate student, or a junior or senior in an institution of higher education, who plans a teaching career in modern foreign languages or area studies.
The following regulations apply to this program:
(a) The regulations in this part 664; and
(b) The Education Department General Administrative Regulations (EDGAR) (34 CFR parts 74, 75, 77, 80, 81, 82, 85, and 86).
(a) Definitions in EDGAR. The following terms used in this part are defined in 34 CFR part 77:
(b)
(1) Admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate;
(2) Is legally authorized within such State to provide a program of education beyond secondary education;
(3) Provides an educational program for which it awards a bachelor's degree or provides not less than a two-year program which is acceptable for full credit toward such a degree;
(4) Is a public or other nonprofit institution; and
(5) Is accredited by a nationally recognized accrediting agency or association.
The Secretary assists projects designed to develop or improve programs in modern foreign language or area studies at the elementary, secondary, or postsecondary level by supporting overseas projects in research, training, and curriculum development by groups of individuals engaged in a common endeavor. Projects may include, as described in §§ 664.11 through 664.14, short-term seminars, curriculum development teams, group research or study, and advanced intensive language programs.
A short-term seminar project is—
(a) Designed to help integrate international studies into an institution's or school system's general curriculum; and
(b) Normally four to six weeks in length and focuses on a particular aspect of area study, such as, for example, the culture of the area or a portion of the culture.
(a) A curriculum development project—
(1) Is designed to permit faculty and administrators in institutions of higher education and elementary and secondary schools, and administrators in State departments of education the opportunity to spend generally from four to eight weeks in a foreign country acquiring resource materials for curriculum development in modern foreign language and area studies; and
(2) Must provide for the systematic use and dissemination in the United States of the acquired materials.
(b) For the purpose of this section, resource materials include artifacts, books, documents, educational films, museum reproductions, recordings, and other instructional material.
(a)(1) A group research or study project is designed to permit a group of faculty of an institution of higher education and graduate and undergraduate students to undertake research or study in a foreign country.
(2) The period of research or study in a foreign country is generally from three to twelve months.
(b) As a prerequisite to participating in a research or training project, participants—
(1) Must possess the requisite language proficiency to conduct the research or study, and disciplinary competence in their area of research; and
(2) In a project of a semester or longer, shall have completed, at a minimum, one semester of intensive language training and one course in area studies relevant to the projects.
(a)(1) An advanced overseas intensive language project is designed to take advantage of the opportunities present in the foreign country that are not present in the United States when providing intensive advanced foreign language training.
(2) Project activities may be carried out during a full year, an academic year, a semester, a trimester, a quarter, or a summer.
(3) Generally, language training must be given at the advanced level, i.e., at the level equivalent to that provided to students who have successfully completed two academic years of language training.
(4) The language to be studied must be indigenous to the host country and maximum use must be made of local institutions and personnel.
(b) Generally, participants in projects under this program must have successfully completed at least two
(a) The Secretary evaluates an application for a Group Project Abroad under the criteria in § 664.31.
(b) In general, the Secretary awards up to 95 possible points for these criteria. However, if priority criteria are used, the Secretary awards up to 110 possible points. The maximum possible points for each criterion are shown in parentheses.
(c) All selections by the Secretary are subject to review and final approval by the J. William Fulbright Foreign Scholarship Board.
(d) The Secretary does not recommend a project to the J. William Fulbright Foreign Scholarship Board if the applicant proposes to carry it out in a country in which the United States does not have diplomatic representation.
The Secretary uses the criteria in this section to evaluate applications for the purpose of recommending to the J. William Fulbright Foreign Scholarship Board projects for funding under this part. The criteria are weighted and may total 105 points:
(a)
(1) The Secretary reviews each application for information to determine the quality of the plan of operation for the project.
(2) The Secretary looks for information that shows—
(i) High quality in the design of the project;
(ii) An effective plan of management that insures proper and efficient administration of the project;
(iii) A clear description of how the objectives of the project relate to the purpose of the program;
(iv) The way the applicant plans to use its resources and personnel to achieve each objective; and
(v) A clear description of how the applicant will ensure that project participants who are otherwise eligible to participate are selected without regard to race, color, national origin, gender, age, or handicapping condition.
(b)
(1) The Secretary reviews each application for information to determine the quality of key personnel the applicant plans to use on the project.
(2) The Secretary looks for information that shows—
(i) The qualifications of the project director;
(ii) The qualifications of each of the other key personnel to be used in the project;
(iii) The time that each person referred to in paragraphs (b)(2) (i) and (ii) of this section will commit to the project; and
(iv) The extent to which the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected for employment without regard to race, color, national origin, gender, age, or handicapping condition.
(3) To determine the qualifications of a person, the Secretary considers evidence of past experience and training in fields related to the objectives of the project as well as other information that the applicant provides.
(c)
(1) The Secretary reviews each application for information that shows that the project has an adequate budget and is cost effective.
(2) The Secretary looks for information that shows—
(i) The budget for the project is adequate to support the project activities; and
(ii) Costs are reasonable in relation to the objectives of the project.
(d)
(1) The Secretary reviews each application for information that shows the quality of the evaluation plan for the project.
(2) The Secretary looks for information that shows that the methods of evaluation are appropriate for the project and, to the extent possible, are objective and produce data that are quantifiable.
(e)
(1) The Secretary reviews each application for information that shows that the applicant plans to devote adequate resources to the project.
(2) The Secretary looks for information that shows that the facilities, equipment, and supplies that the applicant plans to use are adequate.
(f)
(1) In addition to the general selection criteria contained in this section, the Secretary reviews each application for information that shows that the project meets the specific program criteria.
(2) The Secretary looks for information that shows—
(i) The potential impact of the project on the development of the study of modern foreign languages and area studies in American education. (Maximum 15 points).
(ii) The project's relevance to the applicant's educational goals and its relationship to its program development in modern foreign languages and area studies. (Maximum 5 points).
(iii) The extent to which direct experience abroad is necessary to achieve the project's objectives and the effectiveness with which relevant host country resources will be utilized. (Maximum 10 points).
(g)
(a) The Secretary may establish for each funding competition one or more of the following priorities:
(1) Categories of projects described in § 664.10.
(2) Specific languages, topics, countries or geographic regions of the world; for example, Chinese and Arabic, Curriculum Development in Multicultural Education and Transitions from Planned Economies to Market Economies, Brazil and Nigeria, Middle East and South Asia.
(3) Levels of education; for example, elementary and secondary, postsecondary, or postgraduate.
(b) The Secretary announces any priorities in the application notice published in the
(a) The Secretary pays only part of the cost of a project funded under this part. Other than travel costs, the Secretary does not pay any of the costs for project-related expenses within the United States.
(b) The Secretary pays the cost of the following—
(1) A maintenance stipend related to the cost of living in the host country or countries;
(2) Round-trip international travel;
(3) A local travel allowance for necessary project-related transportation within the country of study, exclusive of the purchase of transportation equipment;
(4) Purchase of project-related artifacts, books, and other teaching materials in the country of study;
(5) Rent for instructional facilities in the country of study;
(6) Clerical and professional services performed by resident instructional personnel in the country of study; and
(7) Other expenses in the country of study, if necessary for the project's success and approved in advance by the Secretary.
(c) The Secretary may pay—
(1) Emergency medical expenses not covered by a participant's health and accident insurance; and
(2) The costs of preparing and transporting the remains of a participant who dies during the term of a project to his or her former home.
(a) Participation may be terminated only by the J. William Fulbright Foreign Scholarship Board upon the recommendation of the Secretary.
(b) The Secretary may recommend a termination of participation on the basis of failure by the grantee to ensure that participants adhere to the standards of conduct adopted by the J. William Fulbright Foreign Scholarship Board.
20 U.S.C. 1001, 1002, 1003, 1085, 1091, 1091b, 1092, 1094, 1099c, and 1099c-1, unless otherwise noted.
(a) This part establishes general rules that apply to an institution that participates in any student financial assistance program authorized by Title IV of the Higher Education Act of 1965, as amended (Title IV, HEA program). To the extent that an institution contracts with a third-party servicer to administer any aspect of the institution's participation in any Title IV, HEA program, the applicable rules in this part also apply to that servicer. An institution's use of a third-party servicer does not alter the institution's responsibility for compliance with the rules in this part.
(b) As used in this part, an “institution” includes—
(1) An institution of higher education as defined in 34 CFR 600.4;
(2) A proprietary institution of higher education as defined in 34 CFR 600.5; and
(3) A postsecondary vocational institution as defined in 34 CFR 600.6.
(c) The Title IV, HEA programs include—
(1) The Federal Pell Grant Program (20 U.S.C. 1070a
(2) The National Early Intervention Scholarship and Partnership (NEISP) Program (20 U.S.C. 1070a-21
(3) The Federal Supplemental Educational Opportunity Grant (FSEOG) Program (20 U.S.C. 1070b
(4) The Leveraging Educational Assistance Partnership (LEAP) Program (20 U.S.C. 1070c
(5) The Federal Stafford Loan Program (20 U.S.C. 1071
(6) The Federal PLUS Program (20 U.S.C. 1078-2; 34 CFR part 682);
(7) The Federal Consolidation Loan Program (20 U.S.C. 1078-3; 34 CFR part 682);
(8) The Federal Work-Study (FWS) Program (42 U.S.C. 2751
(9) The William D. Ford Federal Direct Loan (Direct Loan) Program (20 U.S.C. 1087a
(10) The Federal Perkins Loan Program (20 U.S.C. 1087aa
(a) The following definitions are contained in the regulations for Institutional Eligibility under the Higher Education Act of 1965, as amended, 34 CFR part 600:
(b) The following definitions apply to all Title IV, HEA programs:
(2) The Federal Work-Study (FWS) Program (34 CFR parts 673 and 675); and
(3) The Federal Supplemental Educational Opportunity Grant (FSEOG) Program (34 CFR parts 673 and 676).
(1) Has completed the registration requirements (except for the payment of tuition and fees) at the institution that he or she is attending; or
(2) Has been admitted into an educational program offered predominantly by correspondence and has submitted one lesson, completed by him or her after acceptance for enrollment and without the help of a representative of the institution.
(1) Twelve semester hours or 12 quarter hours per academic term in an educational program using a semester, trimester, or quarter system.
(2) Twenty-four semester hours or 36 quarter hours per academic year for an educational program using credit hours but not using a semester, trimester, or quarter system, or the prorated equivalent for a program of less than one academic year.
(3) Twenty-four clock hours per week for an educational program using clock hours.
(4) In an educational program using both credit and clock hours, any combination of credit and clock hours where the sum of the following fractions is equal to or greater than one:
(i) For a program using a semester, trimester, or quarter system—
(ii) For a program not using a semester, trimester, or quarter system—
(5) A series of courses or seminars that equals 12 semester hours or 12 quarter hours in a maximum of 18 weeks.
(6) The work portion of a cooperative education program in which the amount of work performed is equivalent to the academic workload of a full-time student.
(i) Include performing any function required by any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA, such as, but not restricted to—
(A) Processing student financial aid applications;
(B) Performing need analysis;
(C) Determining student eligibility and related activities;
(D) Certifying loan applications;
(E) Processing output documents for payment to students;
(F) Receiving, disbursing, or delivering Title IV, HEA program funds, excluding lock-box processing of loan payments and normal bank electronic fund transfers;
(G) Conducting activities required by the provisions governing student consumer information services in subpart D of this part;
(H) Preparing and certifying requests for advance or reimbursement funding;
(I) Loan servicing and collection;
(J) Preparing and submitting notices and applications required under 34 CFR part 600 and subpart B of this part; and
(K) Preparing a Fiscal Operations Report and Application to Participate (FISAP);
(ii) Exclude the following functions—
(A) Publishing ability-to-benefit tests;
(B) Performing functions as a Multiple Data Entry Processor (MDE);
(C) Financial and compliance auditing;
(D) Mailing of documents prepared by the institution;
(E) Warehousing of records; and
(F) Providing computer services or software; and
(iii) Notwithstanding the exclusions referred to in paragraph (1)(ii) of this definition, include any activity comprised of any function described in paragraph (1)(i) of this definition.
(2) For purposes of this definition, an employee of an institution is not a third-party servicer. The Secretary considers an individual to be an employee if the individual—
(i) Works on a full-time, part-time, or temporary basis;
(ii) Performs all duties on site at the institution under the supervision of the institution;
(iii) Is paid directly by the institution;
(iv) Is not employed by or associated with a third-party servicer; and
(v) Is not a third-party servicer for any other institution.
(2) A person defined in the Immigration and Nationality Act, 8 U.S.C. 1101(a)(22), who, though not a citizen of the United States, owes permanent allegiance to the United States.
(a)
(1) An institution provides a minimum of 30 weeks of instructional time; and
(2) For an undergraduate educational program, a full-time student is expected to complete at least—
(i) Twenty-four semester or trimester credit hours or 36 quarter credit hours for a program measured in credit hours; or
(ii) 900 clock hours for a program measured in clock hours.
(b)
(1) A week is a consecutive seven-day period;
(2) A week of instructional time is any week in which at least one day of regularly scheduled instruction or examinations occurs or, after the last scheduled day of classes for a term or payment period, at least one day of study for final examinations occurs; and
(3) Instructional time does not include any vacation periods, homework, or periods of orientation or counseling.
(c)
(2) An institution's written request must—
(i) Identify each educational program for which the institution requests a reduction, and the requested number of weeks of instructional time for that program;
(ii) Demonstrate good cause for the requested reductions; and
(iii) Include any other information that the Secretary may require to determine whether to grant the request.
(3)(i) The Secretary approves the request of an eligible institution for a reduction in the length of its academic year if the institution has demonstrated good cause for granting the request and the institution's accrediting agency and State licensing agency have approved the request.
(ii) If the Secretary approves the request, the approval terminates when the institution's program participation agreement expires. The institution may request an extension of that approval as part of the recertification process.
(a)
(b)
(i) The first payment period is the period of time in which the student completes half the number of credit hours in the program and half the number of weeks in the program; and
(ii) The second payment period is the period of time in which the student completes the program.
(2) For a student enrolled in an eligible program that is more than one academic year in length—
(i) For the first academic year and any subsequent full academic year—
(A) The first payment period is the period of time in which the student completes half the number of credit hours in the academic year and half the number of weeks in the academic year; and
(B) The second payment period is the period of time in which the student completes the academic year.
(ii) For any remaining portion of an eligible program that is more than one-half an academic year but less than a full academic year in length—
(A) The first payment period is the period of time in which the student completes half the number of credit hours in the remaining portion of the program and half the number of weeks remaining in the program; and
(B) The second payment period is the period of time in which the student completes the remainder of the program.
(iii) For any remaining portion of an eligible program that is not more than half an academic year, the payment period is the remainder of the program.
(3) For purposes of paragraphs (b)(1) and (b)(2) of this section, if an institution is unable to determine when a student has completed half of the credit hours in a program, academic year, or remainder of a program; the student is considered to begin the second payment period of the program, academic year, or remainder of a program at the later of—
(i) The date, as determined by the institution, on which the student has completed half of the academic coursework in the program, academic year, or remainder of the program; or
(ii) The calendar midpoint between the first and last scheduled days of class of the program, academic year, or remainder of the program.
(c)
(i) The first payment period is the period of time in which the student completes half the number of clock hours in the program; and
(ii) The second payment period is the period of time in which the student completes the program.
(2) For a student enrolled in an eligible program that is more than one academic year in length—
(i) For the first academic year and any subsequent full academic year—
(A) The first payment period is the period of time in which the student completes half the number of clock hours in the academic year; and
(B) The second payment period is the period of time in which the student completes the academic year.
(ii) For any remaining portion of an eligible program that is more than one-half an academic year but less than a full academic year in length—
(A) The first payment period is the period of time in which the student completes half the number of clock hours in the remaining portion of the program; and
(B) The second payment period is the period of time in which the student completes the remainder of the program.
(iii) For any remaining portion of an eligible program that is not more than one half of an academic year, the payment period is the remainder of the program.
(d)
(e)
(f)
(i) Reenters that program after 180 days,
(ii) Transfers into another program at the same institution within any time period, or
(iii) Transfers into a program at another institution within any time period.
(2) For a student described in paragraph (f)(1) of this section—
(i) For the purpose of calculating payment periods only, the length of the program is the number of credit hours and the number of weeks, or the number of clock hours, that the student has remaining in the program he or she enters or reenters; and
(ii) If the remaining hours, and weeks if applicable, constitute one-half of an academic year or less, the remaining hours constitute one payment period.
(a)
(b)
(c)
(1) The ineligible institution or organization has not had its eligibility to participate in the title IV, HEA programs terminated by the Secretary, or has not voluntarily withdrawn from participation in those programs under a termination, show-cause, suspension, or similar type proceeding initiated by the institution's State licensing agency, accrediting agency, guarantor, or by the Secretary;
(2) The educational program otherwise satisfies the requirements of § 668.8; and
(3)(i) The ineligible institution or organization provides not more than 25 percent of the educational program; or
(ii)(A) The ineligible institution or organization provides more than 25 percent but not more than 50 percent of the educational program;
(B) The eligible institution and the ineligible institution or organization are not owned or controlled by the same individual, partnership, or corporation; and
(C) The eligible institution's accrediting agency, or if the institution is a public postsecondary vocational educational institution, the State agency listed in the
(d)
(2) In the case of a written arrangement between eligible institutions, the institutions may agree in writing to have any eligible institution in the written arrangement make those calculations and disbursements, and the Secretary does not consider that institution to be a third-party servicer for that arrangement.
(3) The institution that calculates and disburses a student's title IV, HEA
(i) Take into account all the hours in which the student enrolls at each institution that apply to the student's degree or certificate when determining the student's enrollment status and cost of attendance; and (ii) Maintain all records regarding the student's eligibility for and receipt of title IV, HEA program funds.
(a)
(1) Is provided by a participating institution; and
(2) Satisfies the other relevant requirements contained in this section.
(b)
(1) The Secretary considers the “equivalent of an associate degree” to be—
(i) An associate degree; or
(ii) The successful completion of at least a two-year program that is acceptable for full credit toward a bachelor's degree and qualifies a student for admission into the third year of a bachelor's degree program;
(2) A week is a consecutive seven-day period; and
(3)(i) The Secretary considers that an institution provides one week of instructional time in an academic program during any week the institution provides at least one day of regularly scheduled instruction or examinations, or, after the last scheduled day of classes for a term or a payment period, at least one day of study for final examinations.
(ii) Instructional time does not include any vacation periods, homework, or periods of orientation or counseling.
(c)
(1) Lead to an associate, bachelor's, professional, or graduate degree;
(2) Be at least a two-academic-year program that is acceptable for full credit toward a bachelor's degree; or
(3) Be at least a one-academic-year training program that leads to a certificate, degree, or other recognized educational credential and that prepares a student for gainful employment in a recognized occupation.
(d)
(1)(i) Must require a minimum of 15 weeks of instruction, beginning on the first day of classes and ending on the last day of classes or examinations;
(ii) Must be at least 600 clock hours, 16 semester or trimester hours, or 24 quarter hours;
(iii) Must provide undergraduate training that prepares a student for gainful employment in a recognized occupation; and
(iv) May admit as regular students persons who have not completed the equivalent of an associate degree;
(2) Must—
(i) Require a minimum of 10 weeks of instruction, beginning on the first day of classes and ending on the last day of classes or examinations;
(ii) Be at least 300 clock hours, 8 semester or trimester hours, or 12 quarter hours;
(iii) Provide training that prepares a student for gainful employment in a recognized occupation; and
(iv)(A) Be a graduate or professional program; or
(B) Admit as regular students only persons who have completed the equivalent of an associate degree; or
(3) For purposes of the FFEL and Direct Loan programs only, must—
(i) Require a minimum of 10 weeks of instruction, beginning on the first day of classes and ending on the last day of classes or examinations;
(ii) Be at least 300 clock hours but less than 600 clock hours;
(iii) Provide undergraduate training that prepares a student for gainful employment in a recognized occupation;
(iv) Admit as regular students some persons who have not completed the equivalent of an associate degree; and
(v) Satisfy the requirements of paragraph (e) of this section.
(e)
(i) The program has a substantiated completion rate of at least 70 percent, as calculated under paragraph (f) of this section;
(ii) The program has a substantiated placement rate of at least 70 percent, as calculated under paragraph (g) of this section;
(iii) The number of clock hours provided in the program does not exceed by more than 50 percent the minimum number of clock hours required for training in the recognized occupation for which the program prepares students, as established by the State in which the program is offered, if the State has established such a requirement, or as established by any Federal agency; and
(iv) The program has been in existence for at least one year. The Secretary considers an educational program to have been in existence for at least one year only if an institution has been legally authorized to provide, and has continuously provided, the program during the 12 months (except for normal vacation periods and, at the discretion of the Secretary, periods when the institution closes due to a natural disaster that directly affects the institution or the institution's students) preceding the date on which the institution applied for eligibility for that program.
(2) An institution shall substantiate the calculation of its completion and placement rates by having the certified public accountant who prepares its audit report required under § 668.23 report on the institution's calculation based on performing an attestation engagement in accordance with the Statements on Standards for Attestation Engagements of the American Institute of Certified Public Accountants (AICPA).
(f)
(1) Determine the number of regular students who were enrolled in the program during the award year.
(2) Subtract from the number of students determined under paragraph (f)(1) of this section, the number of regular students who, during that award year, withdrew from, dropped out of, or were expelled from the program and were entitled to and actually received, in a timely manner a refund of 100 percent of their tuition and fees.
(3) Subtract from the total obtained under paragraph (f)(2) of this section the number of students who were enrolled in the program at the end of that award year.
(4) Determine the number of regular students who, during that award year, received within 150 percent of the published length of the educational program the degree, certificate, or other recognized educational credential awarded for successfully completing the program.
(5) Divide the number determined under paragraph (f)(4) of this section by the total obtained under paragraph (f)(3) of this section.
(g)
(i) Determine the number of students who, during the award year, received the degree, certificate, or other recognized educational credential awarded for successfully completing the program.
(ii) Of the total obtained under paragraph (g)(1)(i) of this section, determine the number of students who, within 180 days of the day they received their degree, certificate, or other recognized educational credential, obtained gainful employment in the recognized occupation for which they were trained or in a related comparable recognized occupation and, on the date of this calculation, are employed, or have been employed, for at least 13 weeks following receipt of the credential from the institution.
(iii) Divide the number of students determined under paragraph (g)(1)(ii) of this section by the total obtained under paragraph (g)(1)(i) of this section.
(2) An institution shall document that each student described in paragraph (g)(1)(ii) of this section obtained gainful employment in the recognized
(i) A written statement from the student's employer;
(ii) Signed copies of State or Federal income tax forms; and
(iii) Written evidence of payments of Social Security taxes.
(h)
(1) An educational program qualifies as an eligible program for purposes of the Federal Pell Grant Program only if the educational program is an undergraduate program or a postbaccalaureate teacher certificate or licensing program as described in 34 CFR 690.6(c); and
(2) An educational program qualifies as an eligible program for purposes of the FSEOG Program only if the educational program is an undergraduate program.
(i)
(j)
(i) The institution admits to the program only students who the institution determines need the ESL instruction to use already existing knowledge, training, or skills; and
(ii) The program leads to a degree, certificate, or other recognized educational credential.
(2) An institution shall document its determination that ESL instruction is necessary to enable each student enrolled in its ESL program to use already existing knowledge, training, or skills with regard to the students that it admits to its ESL program under paragraph (j)(1)(i) of this section.
(3) An ESL program that qualifies as an eligible program under this paragraph is eligible for purposes of the Federal Pell Grant Program only.
(k)
(1) The program is at least two academic years in length and provides an associate degree, a bachelor's degree, a professional degree, or an equivalent degree as determined by the Secretary; or
(2) Each course within the program is acceptable for full credit toward that institution's associate degree, bachelor's degree, professional degree, or equivalent degree as determined by the Secretary, provided that the institution's degree requires at least two academic years of study.
(l)
(1) A semester hour must include at least 30 clock hours of instruction;
(2) A trimester hour must include at least 30 clock hours of instruction; and
(3) A quarter hour must include at least 20 hours of instruction.
(a) In determining the amount of Title IV, HEA program assistance that a student who is enrolled in a program described in § 668.8(k) is eligible to receive, the institution shall apply the formula contained in § 668.8(l) to determine the number of semester, trimester, or quarter hours in that program, if the institution measures academic progress in that program in semester, trimester, or quarter hours.
(b) Notwithstanding paragraph (a) of this section, a public or private nonprofit hospital-based school of nursing that awards a diploma at the completion of the school's program of education is not required to apply the formula contained in § 668.8(l) to determine the number of semester, trimester, or quarter hours in that program for purposes of calculating Title IV, HEA program assistance.
(a) This subpart establishes standards that an institution must meet in order to participate in any Title IV, HEA program.
(b) Noncompliance with these standards by an institution already participating in any Title IV, HEA program or with applicable standards in this subpart by a third-party servicer that contracts with the institution may subject the institution or servicer, or both, to proceedings under subpart G of this part. These proceedings may lead to any of the following actions:
(1) An emergency action.
(2) The imposition of a fine.
(3) The limitation, suspension, or termination of the participation of the institution in a Title IV, HEA program.
(4) The limitation, suspension, or termination of the eligibility of the servicer to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program.
(a)
(2) Except as provided in paragraph (a)(3) of this section, if an institution wishes to participate for the first time in the title IV, HEA programs or has undergone a change in ownership that results in a change in control as described in 34 CFR 600.31, the institution must require the following individuals to complete title IV, HEA program training provided or approved by the Secretary no later than 12 months after the institution executes its program participation agreement under § 668.14:
(i) The individual the institution designates under § 668.16(b)(1) as its title IV, HEA program administrator.
(ii) The institution's chief administrator or a high level institutional official the chief administrator designates.
(3)(i) An institution may request the Secretary to waive the training requirement for any individual described in paragraph (a)(2) of this section.
(ii) When the Secretary receives a waiver request under paragraph (a)(3)(i) of this section, the Secretary may grant or deny the waiver, require another institutional official to take the training, or require alternative training.
(b)
(2) Provided that an institution has submitted an application for a renewal of certification that is materially complete at least 90 days prior to the expiration of its current period of participation, the institution's existing certification will be extended on a month to month basis following the expiration of the institution's period of participation until the end of the month in which the Secretary issues a decision on the application for recertification.
(c)
(i) The institution seeks initial participation in a Title IV, HEA program;
(ii) The institution is an eligible institution that has undergone a change in ownership that results in a change in control according to the provisions of 34 CFR part 600;
(iii) The institution is a participating institution—
(A) That is applying for a certification that the institution meets the standards of this subpart;
(B) That the Secretary determines has jeopardized its ability to perform its financial responsibilities by not meeting the factors of financial responsibility under § 668.15 or the standards of administrative capability under § 668.16; and
(C) Whose participation has been limited or suspended under subpart G of this part, or voluntarily enters into provisional certification;
(iv) The institution seeks a renewal of participation in a Title IV, HEA program after the expiration of a prior period of participation in that program; or
(v) The institution is a participating institution that was accredited or preaccredited by a nationally recognized accrediting agency on the day before the Secretary withdrew the Secretary's recognition of that agency according to the provisions contained in 34 CFR part 603.
(2) If the Secretary provisionally certifies an institution, the Secretary also specifies the period for which the institution may participate in a Title IV, HEA program. Except as provided in paragraphs (c) (3) and (4) of this section, a provisionally certified institution's period of participation expires—
(i) Not later than the end of the first complete award year following the date on which the Secretary provisionally certified the institution under paragraph (c)(1)(i) of this section;
(ii) Not later than the end of the third complete award year following the date on which the Secretary provisionally certified the institution under paragraphs (c)(1)(ii), (iii), (iv) or (e)(2) of this section; and
(iii) If the Secretary provisionally certified the institution under paragraph (c)(1)(v) of this section, not later than 18 months after the date that the Secretary withdrew recognition from the institutions nationally recognized accrediting agency.
(3) Notwithstanding the maximum periods of participation provided for in paragraph (c)(2) of this section, if the Secretary provisionally certifies an institution, the Secretary may specify a shorter period of participation for that institution.
(4) For the purposes of this section, “provisional certification” means that the Secretary certifies that an institution has demonstrated to the Secretary's satisfaction that the institution—
(i) Is capable of meeting the standards of this subpart within a specified period; and
(ii) Is able to meet the institution's responsibilities under its program participation agreement, including compliance with any additional conditions specified in the institution's program participation agreement that the Secretary requires the institution to meet in order for the institution to participate under provisional certification.
(d)
(2)(i) If the Secretary revokes the provisional certification of an institution under paragraph (d)(1) of this section, the Secretary sends the institution a notice by certified mail, return receipt requested. The Secretary also may transmit the notice by other, more expeditious means, if practical.
(ii) The revocation takes effect on the date that the Secretary mails the notice to the institution.
(iii) The notice states the basis for the revocation, the consequences of the revocation to the institution, and that the institution may request the Secretary to reconsider the revocation. The consequences of a revocation are described in § 668.26.
(3)(i) An institution may request reconsideration of a revocation under this section by submitting to the Secretary, within 20 days of the institution's receipt of the Secretary's notice, written evidence that the revocation is unwarranted. The institution must file the request with the Secretary by hand-delivery, mail, or facsimile transmission.
(ii) The filing date of the request is the date on which the request is—
(A) Hand-delivered;
(B) Mailed; or
(C) Sent by facsimile transmission.
(iii) Documents filed by facsimile transmission must be transmitted to the Secretary in accordance with instructions provided by the Secretary in the notice of revocation. An institution filing by facsimile transmission is responsible for confirming that a complete and legible copy of the document was received by the Secretary.
(iv) The Secretary discourages the use of facsimile transmission for documents longer than five pages.
(4)(i) The designated department official making the decision concerning an institution's request for reconsideration of a revocation is different from, and not subject to supervision by, the official who initiated the revocation of the institution's provisional certification. The deciding official promptly considers an institution's request for reconsideration of a revocation and notifies the institution, by certified mail, return receipt requested, of the final decision. The Secretary also may transmit the notice by other, more expeditious means, if practical.
(ii) If the Secretary determines that the revocation is warranted, the Secretary's notice informs the institution that the institution may apply for reinstatement of participation only after the later of the expiration of—
(A) Eighteen months after the effective date of the revocation; or
(B) A debarment or suspension of the institution under Executive Order (E.O.) 12549 (3 CFR, 1986 comp., p. 189) or the Federal Acquisition Regulations, 48 CFR part 9, subpart 9.4.
(iii) If the Secretary determines that the revocation of the institution's provisional certification is unwarranted, the Secretary's notice informs the institution that the institution's provisional certification is reinstated, effective on the date that the Secretary's original revocation notice was mailed, for a specified period of time.
(5)(i) The mailing date of a notice of revocation or a request for reconsideration of a revocation is the date evidenced on the original receipt of mailing from the U.S. Postal Service.
(ii) The date on which a request for reconsideration of a revocation is submitted is—
(A) If the request was sent by a delivery service other than the U.S. Postal Service, the date evidenced on the original receipt by that service; and
(B) If the request was sent by facsimile transmission, the date that the document is recorded as received by facsimile equipment that receives the transmission.
(a)(1) An institution may participate in any Title IV, HEA program, other than the LEAP and NEISP programs,
(2) An institution's program participation agreement applies to each branch campus and other location of the institution that meets the applicable requirements of this part unless otherwise specified by the Secretary.
(b) By entering into a program participation agreement, an institution agrees that—
(1) It will comply with all statutory provisions of or applicable to Title IV of the HEA, all applicable regulatory provisions prescribed under that statutory authority, and all applicable special arrangements, agreements, and limitations entered into under the authority of statutes applicable to Title IV of the HEA, including the requirement that the institution will use funds it receives under any Title IV, HEA program and any interest or other earnings thereon, solely for the purposes specified in and in accordance with that program;
(2) As a fiduciary responsible for administering Federal funds, if the institution is permitted to request funds under a Title IV, HEA program advance payment method, the institution will time its requests for funds under the program to meet the institution's immediate Title IV, HEA program needs;
(3) It will not request from or charge any student a fee for processing or handling any application, form, or data required to determine a student's eligibility for, and amount of, Title IV, HEA program assistance;
(4) It will establish and maintain such administrative and fiscal procedures and records as may be necessary to ensure proper and efficient administration of funds received from the Secretary or from students under the Title IV, HEA programs, together with assurances that the institution will provide, upon request and in a timely manner, information relating to the administrative capability and financial responsibility of the institution to—
(i) The Secretary;
(ii) A guaranty agency, as defined in 34 CFR part 682, that guarantees loans made under the Federal Stafford Loan and Federal PLUS programs for attendance at the institution or any of the institution's branch campuses or other locations;
(iii) The nationally recognized accrediting agency that accredits or preaccredits the institution or any of the institution's branch campuses, other locations, or educational programs;
(iv) The State agency that legally authorizes the institution and any branch campus or other location of the institution to provide postsecondary education; and
(v) In the case of a public postsecondary vocational educational institution that is approved by a State agency recognized for the approval of public postsecondary vocational education, that State agency;
(5) It will comply with the provisions of § 668.15 relating to factors of financial responsibility;
(6) It will comply with the provisions of § 668.16 relating to standards of administrative capability;
(7) It will submit reports to the Secretary and, in the case of an institution participating in the Federal Stafford Loan, Federal PLUS, or the Federal Perkins Loan Program, to holders of loans made to the institution's students under that program at such times and containing such information as the Secretary may reasonably require to carry out the purpose of the Title IV, HEA programs;
(8) It will not provide any statement to any student or certification to any lender in the case of an FFEL Program loan, or origination record to the Secretary in the case of a Direct Loan Program loan that qualifies the student or parent for a loan or loans in excess of the amount that the student or parent is eligible to borrow in accordance with sections 425(a), 428(a)(2), 428(b)(1)(A)
(9) It will comply with the requirements of subpart D of this part concerning institutional and financial assistance information for students and prospective students;
(10) In the case of an institution that advertises job placement rates as a means of attracting students to enroll in the institution, it will make available to prospective students, at or before the time that those students apply for enrollment—
(i) The most recent available data concerning employment statistics, graduation statistics, and any other information necessary to substantiate the truthfulness of the advertisements; and
(ii) Relevant State licensing requirements of the State in which the institution is located for any job for which an educational program offered by the institution is designed to prepare those prospective students;
(11) In the case of an institution participating in the FFEL program, the institution will inform all eligible borrowers, as defined in 34 CFR part 682, enrolled in the institution about the availability and eligibility of those borrowers for State grant assistance from the State in which the institution is located, and will inform borrowers from another State of the source of further information concerning State grant assistance from that State;
(12) It will provide the certifications described in paragraph (c) of this section;
(13) In the case of an institution whose students receive financial assistance pursuant to section 484(d) of the HEA, the institution will make available to those students a program proven successful in assisting students in obtaining the recognized equivalent of a high school diploma;
(14) It will not deny any form of Federal financial aid to any eligible student solely on the grounds that the student is participating in a program of study abroad approved for credit by the institution;
(15)(i) Except as provided under paragraph (b)(15)(ii) of this section, the institution will use a default management plan approved by the Secretary with regard to its administration of the FFEL or Direct Loan programs, or both for at least the first two years of its participation in those programs, if the institution—
(A) Is participating in the FFEL or Direct Loan programs for the first time; or
(B) Is an institution that has undergone a change of ownership that results in a change in control and is participating in the FFEL or Direct Loan programs.
(ii) The institution does not have to use an approved default management plan if—
(A) The institution, including its main campus and any branch campus, does not have a cohort default rate in excess of 10 percent; and
(B) The owner of the institution does not own and has not owned any other institution that had a cohort default rate in excess of 10 percent while that owner owned the institution.
(16) [Reserved]
(17) The Secretary, guaranty agencies and lenders as defined in 34 CFR part 682, nationally recognized accrediting agencies, the Secretary of Veterans Affairs, State agencies recognized under 34 CFR part 603 for the approval of public postsecondary vocational education, and State agencies that legally authorize institutions and branch campuses or other locations of institutions to provide postsecondary education, have the authority to share with each other any information pertaining to the institution's eligibility for or participation in the Title IV, HEA programs or any information on fraud and abuse;
(18) It will not knowingly—
(i) Employ in a capacity that involves the administration of the Title IV, HEA programs or the receipt of funds under those programs, an individual who has been convicted of, or has pled
(ii) Contract with an institution or third-party servicer that has been terminated under section 432 of the HEA for a reason involving the acquisition, use, or expenditure of Federal, State, or local government funds, or that has been administratively or judicially determined to have committed fraud or any other material violation of law involving Federal, State, or local government funds; or
(iii) Contract with or employ any individual, agency, or organization that has been, or whose officers or employees have been—
(A) Convicted of, or pled
(B) Administratively or judicially determined to have committed fraud or any other material violation of law involving Federal, State, or local government funds;
(19) It will complete, in a timely manner and to the satisfaction of the Secretary, surveys conducted as a part of the Integrated Postsecondary Education Data System (IPEDS) or any other Federal collection effort, as designated by the Secretary, regarding data on postsecondary institutions;
(20) In the case of an institution that is co-educational and has an intercollegiate athletic program, it will comply with the provisions of § 668.48;
(21) It will not impose any penalty, including, but not limited to, the assessment of late fees, the denial of access to classes, libraries, or other institutional facilities, or the requirement that the student borrow additional funds for which interest or other charges are assessed, on any student because of the student's inability to meet his or her financial obligations to the institution as a result of the delayed disbursement of the proceeds of a Title IV, HEA program loan due to compliance with statutory and regulatory requirements of or applicable to the Title IV, HEA programs, or delays attributable to the institution;
(22)(i) It will not provide any commission, bonus, or other incentive payment based directly or indirectly upon success in securing enrollments or financial aid to any person or entity engaged in any student recruiting or admission activities or in making decisions regarding the awarding of title IV, HEA program funds, except that this limitation does not apply to the recruitment of foreign students residing in foreign countries who are not eligible to receive title IV, HEA program funds.
(ii) Activities and arrangements that an institution may carry out without violating the provisions of paragraph (b)(22)(i) of this section include, but are not limited to:
(A) The payment of fixed compensation, such as a fixed annual salary or a fixed hourly wage, as long as that compensation is not adjusted up or down more than twice during any twelve month period, and any adjustment is not based solely on the number of students recruited, admitted, enrolled, or awarded financial aid. For this purpose, an increase in fixed compensation resulting from a cost of living increase that is paid to all or substantially all full-time employees is not considered an adjustment.
(B) Compensation to recruiters based upon their recruitment of students who enroll only in programs that are not eligible for title IV, HEA program funds.
(C) Compensation to recruiters who arrange contracts between the institution and an employer under which the employer's employees enroll in the institution, and the employer pays, directly or by reimbursement, 50 percent or more of the tuition and fees charged to its employees; provided that the compensation is not based upon the number of employees who enroll in the institution, or the revenue they generate, and the recruiters have no contact with the employees.
(D) Compensation paid as part of a profit-sharing or bonus plan, as long as those payments are substantially the same amount or the same percentage of salary or wages, and made to all or substantially all of the institution's full-time professional and administrative staff. Such payments can be limited to all, or substantially all of the full-time employees at one or more organizational level at the institution, except that an organizational level
(E) Compensation that is based upon students successfully completing their educational programs, or one academic year of their educational programs, whichever is shorter. For this purpose, successful completion of an academic year means that the student has earned at least 24 semester or trimester credit hours or 36 quarter credit hours, or has successfully completed at least 900 clock hours of instruction at the institution.
(F) Compensation paid to employees who perform clerical “pre-enrollment” activities, such as answering telephone calls, referring inquiries, or distributing institutional materials.
(G) Compensation to managerial or supervisory employees who do not directly manage or supervise employees who are directly involved in recruiting or admissions activities, or the awarding of title IV, HEA program funds.
(H) The awarding of token gifts to the institution's students or alumni, provided that the gifts are not in the form of money, no more than one gift is provided annually to an individual, and the cost of the gift is not more than $100.
(I) Profit distributions proportionately based upon an individual's ownership interest in the institution.
(J) Compensation paid for Internet-based recruitment and admission activities that provide information about the institution to prospective students, refer prospective students to the institution, or permit prospective students to apply for admission on-line.
(K) Payments to third parties, including tuition sharing arrangements, that deliver various services to the institution, provided that none of the services involve recruiting or admission activities, or the awarding of title IV, HEA program funds.
(L) Payments to third parties, including tuition sharing arrangements, that deliver various services to the institution, even if one of the services involves recruiting or admission activities or the awarding of title IV, HEA program funds, provided that the individuals performing the recruitment or admission activities, or the awarding of title IV, HEA program funds, are not compensated in a manner that would be impermissible under paragraph (b)(22) of this section.
(23) It will meet the requirements established pursuant to part H of Title IV of the HEA by the Secretary and nationally recognized accrediting agencies;
(24) It will comply with the requirements of § 668.22;
(25) It is liable for all—
(i) Improperly spent or unspent funds received under the Title IV, HEA programs, including any funds administered by a third-party servicer; and
(ii) Returns of title IV, HEA program funds that the institution or its servicer may be required to make; and
(26) If the stated objectives of an educational program of the institution are to prepare a student for gainful employment in a recognized occupation, the institution will—
(i) Demonstrate a reasonable relationship between the length of the program and entry level requirements for the recognized occupation for which the program prepares the student. The Secretary considers the relationship to be reasonable if the number of clock hours provided in the program does not exceed by more than 50 percent the minimum number of clock hours required for training in the recognized occupation for which the program prepares the student, as established by the State in which the program is offered, if the State has established such a requirement, or as established by any Federal agency; and
(ii) Establish the need for the training for the student to obtain employment in the recognized occupation for which the program prepares the student.
(c) In order to participate in any Title IV, HEA program (other than the LEAP and NEISP programs), the institution must certify that it—
(1) Has in operation a drug abuse prevention program that the institution has determined to be accessible to any officer, employee, or student at the institution; and
(2)(i) Has established a campus security policy in accordance with section 485(f) of the HEA; and
(ii) Has complied with the disclosure requirements of § 668.47 as required by section 485(f) of the HEA.
(d)(1) The institution, if located in a State to which section 4(b) of the National Voter Registration Act (42 U.S.C. 1973gg-2(b)) does not apply, will make a good faith effort to distribute a mail voter registration form, requested and received from the State, to each student enrolled in a degree or certificate program and physically in attendance at the institution, and to make those forms widely available to students at the institution.
(2) The institution must request the forms from the State 120 days prior to the deadline for registering to vote within the State. If an institution has not received a sufficient quantity of forms to fulfill this section from the State within 60 days prior to the deadline for registering to vote in the State, the institution is not liable for not meeting the requirements of this section during that election year.
(3) This paragraph applies to elections as defined in section 301(1) of the Federal Election Campaign Act of 1971 (2 U.S.C. 431(1)), and includes the election for Governor or other chief executive within such State.
(e)(1) A program participation agreement becomes effective on the date that the Secretary signs the agreement.
(2) A new program participation agreement supersedes any prior program participation agreement between the Secretary and the institution.
(f)(1) Except as provided in paragraphs (h) and (i) of this section, the Secretary terminates a program participation agreement through the proceedings in subpart G of this part.
(2) An institution may terminate a program participation agreement.
(3) If the Secretary or the institution terminates a program participation agreement under paragraph (g) of this section, the Secretary establishes the termination date.
(g) An institution's program participation agreement automatically expires on the date that—
(1) The institution changes ownership that results in a change in control as determined by the Secretary under 34 CFR part 600; or
(2) The institution's participation ends under the provisions of § 668.26(a) (1), (2), (4), or (7).
(h) An institution's program participation agreement no longer applies to or covers a location of the institution as of the date on which that location ceases to be a part of the participating institution.
(a)
(b)
(1) Is providing the services described in its official publications and statements;
(2) Is providing the administrative resources necessary to comply with the requirements of this subpart;
(3) Is meeting all of its financial obligations, including but not limited to—
(i) Refunds that it is required to make; and
(ii) Repayments to the Secretary for liabilities and debts incurred in programs administered by the Secretary;
(4) Is current in its debt payments. The institution is not considered current in its debt payments if—
(i) The institution is in violation of any existing loan agreement at its fiscal year end, as disclosed in a note to its audited financial statement; or
(ii) the institution fails to make a payment in accordance with existing debt obligations for more than 120 days, and at least one creditor has filed suit to recover those funds;
(5) Except as provided in paragraph (d) of this section, in accordance with
(6) Has not had, as part of the audit report for the institution's most recently completed fiscal year—
(i) A statement by the accountant expressing substantial doubt about the institution's ability to continue as a going concern; or
(ii) A disclaimed or adverse opinion by the accountant;
(7) For a for-profit institution—
(i)(A) Demonstrates at the end of its latest fiscal year, an acid test ratio of at least 1:1. For purposes of this section, the acid test ratio shall be calculated by adding cash and cash equivalents to current accounts receivable and dividing the sum by total current liabilities. The calculation of the acid test ratio shall exclude all unsecured or uncollateralized related party receivables;
(B) Has not had operating losses in either or both of its two latest fiscal years that in sum result in a decrease in tangible net worth in excess of 10 percent of the institution's tangible net worth at the beginning of the first year of the two-year period. The Secretary may calculate an operating loss for an institution by excluding from net income: extraordinary gains or losses; income or losses from discontinued operations; prior period adjustment; and, the cumulative effect of changes in accounting principle. For purposes of this section, the calculation of tangible net worth shall exclude all assets defined as intangible in accordance with generally accepted accounting principles; and
(C) Had, for its latest fiscal year, a positive tangible net worth. In applying this standard, a positive tangible net worth occurs when the institution's tangible assets exceed its liabilities. The calculation of tangible net worth shall exclude all assets classified as intangible in accordance with the generally accepted accounting principles; or
(ii) Demonstrates to the satisfaction of the Secretary that it has currently issued and outstanding debt obligations that are (without insurance, guarantee, or credit enhancement) listed at or above the second highest rating level of credit quality given by a nationally recognized statistical rating organization;
(8) For a nonprofit institution—
(i)(A) Prepares a classified statement of financial position in accordance with generally accepted accounting principles or provides the required information in notes to the audited financial statements;
(B) Demonstrates at the end of its latest fiscal year, an acid test ratio of at least 1:1. For purposes of this section, the acid test ratio shall be calculated by adding cash and cash equivalents to current accounts receivable and dividing the sum by total current liabilities. The calculation of the acid test ratio shall exclude all unsecured or uncollateralized related party receivables.
(C)(
(
(ii) Demonstrates to the satisfaction of the Secretary that it has currently issued and outstanding debt obligations which are (without insurance, guarantee, or credit enhancement) listed at or above the second highest rating level of credit quality given by a nationally recognized statistical rating organization.
(9) For a public institution—
(i) Has its liabilities backed by the full faith and credit of a State, or by an equivalent governmental entity;
(ii) Has a positive current unrestricted fund balance if reporting under the Single Audit Act;
(iii) Has a positive unrestricted current fund in the State's Higher Education Fund, as presented in the general purpose financial statements;
(iv) Submits to the Secretary, a statement from the State Auditor General that the institution has, during the past year, met all of its financial obligations, and that the institution continues to have sufficient resources to meet all of its financial obligations; or
(v) Demonstrates to the satisfaction of the Secretary that it has currently issued and outstanding debt obligations which are (without insurance, guarantee, or credit enhancement) listed at or above the second highest rating level of credit quality given by a nationally recognized statistical rating organization.
(c)
(1) A person who exercises substantial control over the institution or any member or members of the person's family alone or together—
(i)(A) Exercises or exercised substantial control over another institution or a third-party servicer that owes a liability for a violation of a Title IV, HEA program requirement; or
(B) Owes a liability for a violation of a Title IV, HEA program requirement; and
(ii) That person, family member, institution, or servicer does not demonstrate that the liability is being repaid in accordance with an agreement with the Secretary; or
(2) The institution has—
(i) Been limited, suspended, terminated, or entered into a settlement agreement to resolve a limitation, suspension, or termination action initiated by the Secretary or a guaranty agency (as defined in 34 CFR part 682) within the preceding five years;
(ii) Had—
(A) An audit finding, during its two most recent audits of its conduct of the Title IV, HEA programs, that resulted in the institution's being required to repay an amount greater than five percent of the funds that the institution received under the Title IV, HEA programs for any award year covered by the audit; or
(B) A program review finding, during its two most recent program reviews, of its conduct of the Title IV, HEA programs that resulted in the institution's being required to repay an amount greater than five percent of the funds that the institution received under the Title IV, HEA programs for any award year covered by the program review;
(iii) Been cited during the preceding five years for failure to submit acceptable audit reports required under this part or individual Title IV, HEA program regulations in a timely fashion; or
(iv) Failed to resolve satisfactorily any compliance problems identified in program review or audit reports based upon a final decision of the Secretary issued pursuant to subpart G or subpart H of this part.
(d)
(A)(
(
(B) Has its liabilities backed by the full faith and credit of the State, or by an equivalent governmental entity; or
(C) As determined under paragraph (g) of this section, demonstrates, to the satisfaction of the Secretary, that for each of the institution's two most recently completed fiscal years, it has made timely refunds to students in accordance with § 668.22(j)(4), and that it has met or exceeded all of the financial responsibility standards in this section that were in effect for the corresponding periods during the two-year period.
(ii) In evaluating an application to approve a State tuition recovery fund to exempt its participating schools from the Federal cash reserve requirements, the Secretary will consider the extent to which the State tuition recovery fund:
(A) Provides refunds to both in-state and out-of-state students;
(B) Allocates all refunds in accordance with the order delineated in § 668.22(h); and
(C) Provides a reliable mechanism for the State to replenish the fund should any claims arise that deplete the funds assets.
(2) The Secretary considers an institution to be financially responsible, even if the institution is not otherwise financially responsible under paragraphs (b)(1) through (4) and (b)(6) through (9) of this section, if the institution—
(i) Submits to the Secretary an irrevocable letter of credit that is acceptable and payable to the Secretary equal to not less than one-half of the Title IV, HEA program funds received by the institution during the last complete award year for which figures are available; or
(ii) Establishes to the satisfaction of the Secretary, with the support of a financial statement submitted in accordance with paragraph (e) of this section, that the institution has sufficient resources to ensure against its precipitous closure, including the ability to meet all of its financial obligations (including refunds of institutional charges and repayments to the Secretary for liabilities and debts incurred in programs administered by the Secretary). The Secretary considers the institution to have sufficient resources to ensure against precipitous closure only if—
(A) The institution formerly demonstrated financial responsibility under the standards of financial responsibility in its preceding audited financial statement (or, if no prior audited financial statement was requested by the Secretary, demonstrates in conjunction with its current audit that it would have satisfied this requirement), and that its most recent audited financial statement indicates that—
(
(
(
(
(
(
(
(B) There have been no material findings in the institution's latest compliance audit of its administration of the Title IV HEA programs; and
(C) There are no pending administrative or legal actions being taken against the institution by the Secretary, any other Federal agency, the institution's nationally recognized accrediting agency, or any State entity.
(3) An institution is not required to meet the acid test ratio in paragraph (b)(7)(i)(A) or (b)(8)(i)(B) of this section if the institution is an institution that provides a 2-year or 4-year educational program for which the institution awards an associate or baccalaureate degree that demonstrates to the satisfaction of the Secretary that—
(i) There is no reasonable doubt as to its continued solvency and ability to deliver quality educational services;
(ii) It is current in its payment of all current liabilities, including student refunds, repayments to the Secretary, payroll, and payment of trade creditors and withholding taxes; and
(iii) It has substantial equity in institution-occupied facilities, the acquisition of which was the direct cause of its failure to meet the acid test ratio requirement.
(4) The Secretary may determine an institution to be financially responsible even if the institution is not otherwise financially responsible under paragraph (c)(1) of this section if—
(i) The institution notifies the Secretary, in accordance with 34 CFR 600.30, that the person referenced in paragraph (c)(1) of this section exercises substantial control over the institution; and
(ii)(A) The person repaid to the Secretary a portion of the applicable liability, and the portion repaid equals or exceeds the greater of—
(
(
(
(B) The applicable liability described in paragraph (c)(1) of this section is currently being repaid in accordance with a written agreement with the Secretary; or
(C) The institution demonstrates why—
(
(
(e) [Reserved]
(f)
(1)(i) An “ownership interest” is a share of the legal or beneficial ownership or control of, or a right to share in the proceeds of the operation of, an institution, institution's parent corporation, a third-party servicer, or a third-party servicer's parent corporation.
(ii) The term “ownership interest” includes, but is not limited to—
(A) An interest as tenant in common, joint tenant, or tenant by the entireties;
(B) A partnership; and
(C) An interest in a trust.
(iii) The term “ownership interest” does not include any share of the ownership or control of, or any right to share in the proceeds of the operation of—
(A) A mutual fund that is regularly and publicly traded;
(B) An institutional investor; or
(C) A profit-sharing plan, provided that all employees are covered by the plan;
(2) The Secretary generally considers a person to exercise substantial control over an institution or third-party servicer, if the person—
(i) Directly or indirectly holds at least a 25 percent ownership interest in the institution or servicer;
(ii) Holds, together with other members of his or her family, at least a 25 percent ownership interest in the institution or servicer;
(iii) Represents, either alone or together with other persons, under a voting trust, power of attorney, proxy, or similar agreement one or more persons who hold, either individually or in combination with the other persons represented or the person representing them, at least a 25 percent ownership in the institution or servicer; or
(iv) Is a member of the board of directors, the chief executive officer, or other executive officer of—
(A) The institution or servicer; or
(B) An entity that holds at least a 25 percent ownership interest in the institution or servicer; and
(3) The Secretary considers a member of a person's family to be a parent, sibling, spouse, child, spouse's parent or sibling, or sibling's or child's spouse.
(g)
(i)(A) For either of those fiscal years, did not find in the sample of student records audited or reviewed that the institution made late refunds to 5 percent or more of the students in that sample. For purposes of determining the percentage of late refunds under this paragraph, the auditor or reviewer must include in the sample only those title IV, HEA program recipients who received or should have received a refund under § 668.22; or
(B) The Secretary considers the institution to have satisfied the conditions in paragraph (g)(1)(i)(A) of this section if the auditor or reviewer finds in the sample of student records audited or reviewed that the institution made only one late refund to a student in that sample; and
(ii) For either of those fiscal years, did not note a material weakness or a reportable condition in the institution's report on internal controls that is related to refunds.
(2) If the Secretary or a State or guaranty agency finds during a review conducted of the institution that the institution no longer qualifies for an exemption under paragraph (d)(1)(C) of this section, the institution must—
(i) Submit to the Secretary the irrevocable letter of credit required in paragraph (b)(5) of this section no later than 30 days after the Secretary or State or guaranty agency notifies the institution of that finding; and
(ii) Notify the Secretary of the guaranty agency or State that conducted the review.
(3) If the auditor who conducted the institution's compliance audit finds that the institution no longer qualifies for an exemption under paragraph (d)(1)(C) of this section, the institution must submit to the Secretary the irrevocable letter of credit required in paragraph (b)(5) of this section no later than 30 days after the date the institution's compliance audit must be submitted to the Secretary.
(h)
(1) If the institution received less than $500,000 U.S. in title IV, HEA program funds during its most recently completed fiscal year, the institution must submit its audited financial statement for that year. For purposes of this paragraph, the audited financial statements may be prepared under the auditing standards and accounting principles used in the institution's home country; or
(2) If the institution received $500,000 U.S. or more in title IV, HEA program funds during its most recently completed fiscal year, the institution must submit its audited financial statement in accordance with the requirements of § 668.23, and satisfy the general standards of financial responsibility contained in this section, or qualify under an alternate standard of financial responsibility contained in this section.
To begin and to continue to participate in any Title IV, HEA program, an institution shall demonstrate to the Secretary that the institution is capable of adequately administering that program under each of the standards established in this section. The Secretary considers an institution to have that administrative capability if the institution—
(a) Administers the Title IV, HEA programs in accordance with all statutory provisions of or applicable to Title IV of the HEA, all applicable regulatory provisions prescribed under that statutory authority, and all applicable special arrangements, agreements, and limitations entered into under the authority of statutes applicable to Title IV of the HEA;
(b)(1) Designates a capable individual to be responsible for administering all the Title IV, HEA programs in which it participates and for coordinating those programs with the institution's other Federal and non-Federal programs of student financial assistance. The Secretary considers an individual to be “capable” under this paragraph if the individual is certified by the State in which the institution is located, if the State requires certification of financial aid administrators. The Secretary may consider other factors in determining whether an individual is capable, including, but not limited to, the individual's successful completion of Title IV, HEA program training provided or approved by the Secretary, and previous experience and documented success in administering the Title IV, HEA programs properly;
(2) Uses an adequate number of qualified persons to administer the Title IV, HEA programs in which the institution participates. The Secretary considers the following factors to determine whether an institution uses an adequate number of qualified persons—
(i) The number and types of programs in which the institution participates;
(ii) The number of applications evaluated;
(iii) The number of students who receive any student financial assistance at the institution and the amount of funds administered;
(iv) The financial aid delivery system used by the institution;
(v) The degree of office automation used by the institution in the administration of the Title IV, HEA programs;
(vi) The number and distribution of financial aid staff; and
(vii) The use of third-party servicers to aid in the administration of the Title IV, HEA programs;
(3) Communicates to the individual designated to be responsible for administering Title IV, HEA programs, all the information received by any institutional office that bears on a student's eligibility for Title IV, HEA program assistance; and
(4) Has written procedures for or written information indicating the responsibilities of the various offices with respect to the approval, disbursement, and delivery of Title IV, HEA program assistance and the preparation and submission of reports to the Secretary;
(c)(1) Administers Title IV, HEA programs with adequate checks and balances in its system of internal controls; and
(2) Divides the functions of authorizing payments and disbursing or delivering funds so that no office has responsibility for both functions with respect to any particular student aided under the programs. For example, the functions of authorizing payments and disbursing or delivering funds must be
(d) Establishes and maintains records required under this part and the individual Title IV, HEA program regulations;
(e) For purposes of determining student eligibility for assistance under a Title IV, HEA program, establishes, publishes, and applies reasonable standards for measuring whether an otherwise eligible student is maintaining satisfactory progress in his or her educational program. The Secretary considers an institution's standards to be reasonable if the standards—
(1) Are the same as or stricter than the institution's standards for a student enrolled in the same educational program who is not receiving assistance under a Title IV, HEA program;
(2) Include the following elements:
(i) A qualitative component which consists of grades (provided that the standards meet or exceed the requirements of § 668.34), work projects completed, or comparable factors that are measurable against a norm.
(ii) A quantitative component that consists of a maximum timeframe in which a student must complete his or her educational program. The timeframe must—
(A) For an undergraduate program, be no longer than 150 percent of the published length of the educational program measured in academic years, terms, credit hours attempted, clock hours completed, etc. as appropriate;
(B) Be divided into increments, not to exceed the lesser of one academic year or one-half the published length of the educational program;
(C) Include a schedule established by the institution designating the minimum percentage or amount of work that a student must successfully complete at the end of each increment to complete his or her educational program within the maximum timeframe; and
(D) Include specific policies defining the effect of course incompletes, withdrawals, repetitions, and noncredit remedial courses on satisfactory progress;
(3) Provide for consistent application of standards to all students within categories of students, e.g., full-time, part-time, undergraduate, and graduate students, and educational programs established by the institution;
(4) Provide for a determination at the end of each increment by the institution as to whether the student has met the qualitative and quantitative components of the standards (as provided for in paragraphs (e)(2)(i) and (ii) of this section);
(5) Provide specific procedures under which a student may appeal a determination that the student is not making satisfactory progress; and
(6) Provide specific procedures for a student to re-establish that he or she is maintaining satisfactory progress.
(f) Develops and applies an adequate system to identify and resolve discrepancies in the information that the institution receives from different sources with respect to a student's application for financial aid under Title IV, HEA programs. In determining whether the institution's system is adequate, the Secretary considers whether the institution obtains and reviews—
(1) All student aid applications, need analysis documents, Statements of Educational Purpose, Statements of Registration Status, and eligibility notification documents presented by or on behalf of each applicant;
(2) Any documents, including any copies of State and Federal income tax returns, that are normally collected by the institution to verify information received from the student or other sources; and
(3) Any other information normally available to the institution regarding a student's citizenship, previous educational experience, documentation of the student's social security number, or other factors relating to the student's eligibility for funds under the Title IV, HEA programs;
(g) Refers to the Office of Inspector General of the Department of Education for investigation—
(1) After conducting the review of an application provided for under paragraph (f) of this section, any credible information indicating that an applicant for Title IV, HEA program assistance may have engaged in fraud or other criminal misconduct in connection with his or her application. The type of information that an institution must refer is that which is relevant to the eligibility of the applicant for Title IV, HEA program assistance, or the amount of the assistance. Examples of this type of information are—
(i) False claims of independent student status;
(ii) False claims of citizenship;
(iii) Use of false identities;
(iv) Forgery of signatures or certifications; and
(v) False statements of income; and
(2) Any credible information indicating that any employee, third-party servicer, or other agent of the institution that acts in a capacity that involves the administration of the Title IV, HEA programs, or the receipt of funds under those programs, may have engaged in fraud, misrepresentation, conversion or breach of fiduciary responsibility, or other illegal conduct involving the Title IV, HEA programs. The type of information that an institution must refer is that which is relevant to the eligibility and funding of the institution and its students through the Title IV, HEA programs;
(h) Provides adequate financial aid counseling to eligible students who apply for Title IV, HEA program assistance. In determining whether an institution provides adequate counseling, the Secretary considers whether its counseling includes information regarding—
(1) The source and amount of each type of aid offered;
(2) The method by which aid is determined and disbursed, delivered, or applied to a student's account; and
(3) The rights and responsibilities of the student with respect to enrollment at the institution and receipt of financial aid. This information includes the institution's refund policy, the requirements for the treatment of title IV, HEA program funds when a student withdraws under § 668.22, its standards of satisfactory progress, and other conditions that may alter the student's aid package;
(i) Has provided all program and fiscal reports and financial statements required for compliance with the provisions of this part and the individual program regulations in a timely manner;
(j) Shows no evidence of significant problems that affect, as determined by the Secretary, the institution's ability to administer a Title IV, HEA program and that are identified in—
(1) Reviews of the institution conducted by the Secretary, the Department of Education's Office of Inspector General, nationally recognized accrediting agencies, guaranty agencies as defined in 34 CFR part 682, the State agency or official by whose authority the institution is legally authorized to provide postsecondary education, or any other law enforcement agency; or
(2) Any findings made in any criminal, civil, or administrative proceeding;
(k) Is not, and does not have any principal or affiliate of the institution (as those terms are defined in 34 CFR part 85) that is—
(1) Debarred or suspended under Executive Order (E.O.) 12549 (3 CFR, 1986 Comp., p. 189) or the Federal Acquisition Regulations (FAR), 48 CFR part 9, subpart 9.4; or
(2) Engaging in any activity that is a cause under 34 CFR 85.305 or 85.405 for debarment or suspension under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4;
(l) For an institution that seeks initial participation in a Title IV, HEA program, does not have more than 33 percent of its undergraduate regular students withdraw from the institution during the institution's latest completed award year. The institution must count all regular students who are enrolled during the latest completed award year, except those students who, during that period—
(1) Withdrew from, dropped out of, or were expelled from the institution;
(2) Were entitled to and actually received in a timely manner, a refund of 100 percent of their tuition and fees;
(m)(1) Has a cohort default rate—
(i) Calculated under subpart M of this part, that is less than 25 percent for
(ii) As defined in 34 CFR 674.5, on loans made under the Federal Perkins Loan Program to students for attendance at that institution that does not exceed 15 percent;
(2)(i) However, if the Secretary determines that an institution's administrative capability is impaired solely because the institution fails to comply with paragraph (m)(1) of this section, the Secretary allows the institution to continue to participate in the Title IV, HEA programs but may provisionally certify the institution in accordance with § 668.13(c); and
(ii) The institution may appeal the loss of full participation in a Title IV, HEA program under paragraph (m)(1) of this section by submitting an erroneous data appeal in writing to the Secretary in accordance with and on the grounds specified in subpart M of this part;
(n) Does not otherwise appear to lack the ability to administer the Title IV, HEA programs competently; and
(o) Participates in the electronic processes that the Secretary—
(1) Provides at no substantial charge to the institution; and
(2) Identifies through a notice published in the
(a) Before an institution may disburse title IV, HEA program funds to a student who previously attended another eligible institution, the institution must use information it obtains from the Secretary, through the National Student Loan Data System (NSLDS) or its successor system, to determine—
(1) Whether the student is in default on any title IV, HEA program loan;
(2) Whether the student owes an overpayment on any title IV, HEA program grant or Federal Perkins Loan;
(3) For the award year for which a Federal Pell Grant is requested, the student's scheduled Federal Pell Grant and the amount of Federal Pell Grant funds disbursed to the student;
(4) The outstanding principal balance of loans made to the student under each of the title IV, HEA loan programs; and
(5) For the academic year for which title IV, HEA aid is requested, the amount of, and period of enrollment for, loans made to the student under each of the title IV, HEA loan programs.
(b)(1) If a student transfers from one institution to another institution during the same award year, the institution to which the student transfers must request from the Secretary, through NSLDS, updated information about that student so it can make the determinations required under paragraph (a) of this section; and
(2) The institution may not make a disbursement to that student for seven days following its request, unless it receives the information from NSLDS in response to its request or obtains that information directly by accessing NSLDS, and the information it receives allows it to make that disbursement.
(a) A noncredit or reduced credit remedial course is a course of study designed to increase the ability of a student to pursue a course of study leading to a certificate or degree.
(1) A noncredit remedial course is one for which no credit is given toward a certificate or degree; and
(2) A reduced credit remedial course is one for which reduced credit is given toward a certificate or degree.
(b) Except as provided in paragraphs (c) and (d) of this section, in determining a student's enrollment status and cost of attendance, an institution shall include any noncredit or reduced credit remedial course in which the student is enrolled. The institution shall attribute the number of credit or clock hours to a noncredit or reduced credit remedial course by—
(1) Calculating the number of classroom and homework hours required for that course;
(2) Comparing those hours with the hours required for nonremedial courses in a similar subject; and
(3) Giving the remedial course the same number of credit or clock hours it gives the nonremedial course with the most comparable classroom and homework requirements.
(c) In determining a student's enrollment status under the Title IV, HEA programs or a student's cost of attendance under the campus-based, FFEL, and Direct Loan programs, an institution may not take into account any noncredit or reduced credit remedial course if—
(1) That course is part of a program of instruction leading to a high school diploma or the recognized equivalent of a high school diploma, even if the course is necessary to enable the student to complete a degree or certificate program;
(2) The educational level of instruction provided in the noncredit or reduced credit remedial course is below the level needed to pursue successfully the degree or certificate program offered by that institution after one year in that remedial course; or
(3) Except for a course in English as a second language, the educational level of instruction provided in that course is below the secondary level. For purposes of this section, the Secretary considers a course to be below the secondary level if any of the following entities determine that course to be below the secondary level:
(i) The State agency that legally authorized the institution to provide postsecondary education.
(ii) In the case of an accredited or preaccredited institution, the nationally recognized accrediting agency or association that accredits or preaccredits the institution.
(iii) In the case of a public postsecondary vocational institution that is approved by a State agency recognized for the approval of public postsecondary vocational education, the State agency recognized for the approval of public postsecondary vocational education that approves the institution.
(iv) The institution.
(d) Except as set forth in paragraph (f) of this section, an institution may not take into account more than one academic year's worth of noncredit or reduced credit remedial coursework in determining—
(1) A student's enrollment status under the title IV, HEA programs; and
(2) A student's cost of attendance under the campus-based, FFEL, and Direct Loan programs.
(e) One academic year's worth of noncredit or reduced credit remedial coursework is equivalent to—
(1) Thirty semester or 45 quarter hours; or
(2) Nine hundred clock hours.
(f) Courses in English as a second language do not count against the one-year academic limitation contained in paragraph (d) of this section.
(a)(1) If a student officially withdraws, drops out, or is expelled before his or her first day of class of a payment period, all funds paid to the student for that payment period for institutional or noninstitutional costs under the Federal Pell Grant, FSEOG, and Federal Perkins Loan programs are an overpayment.
(2) The institution shall return that overpayment to the respective title IV, HEA programs in the amount that the student received from each program.
(b) For purposes of this section, the Secretary considers that a student drops out before his or her first day of
(a)
(2) If the total amount of title IV grant or loan assistance, or both, that the student earned as calculated under paragraph (e)(1) of this section is less than the amount of title IV grant or loan assistance that was disbursed to the student or on behalf of the student in the case of a PLUS loan, as of the date of the institution's determination that the student withdrew—
(i) The difference between these amounts must be returned to the title IV programs in accordance with paragraphs (g) and (h) of this section in the order specified in paragraph (i) of this section; and
(ii) No additional disbursements may be made to the student for the payment period or period of enrollment.
(3) If the total amount of title IV grant or loan assistance, or both, that the student earned as calculated under paragraph (e)(1) of this section is greater than the total amount of title IV grant or loan assistance, or both, that was disbursed to the student or on behalf of the student in the case of a PLUS loan, as of the date of the institution's determination that the student withdrew, the difference between these amounts must be treated as a post-withdrawal disbursement in accordance with paragraph (a)(4) of this section and § 668.164(g).
(4)(i)(A) If outstanding charges exist on the student's account, the institution may credit the student's account in accordance with § 668.164(d)(1), (d)(2), and (d)(3) with all or a portion of the post-withdrawal disbursement described in paragraph (a)(3) of this section, up to the amount of the outstanding charges.
(B) If Direct Loan, FFEL, or Federal Perkins Loan Program funds are used to credit the student's account, the institution must notify the student, or parent in the case of a PLUS loan, and provide an opportunity for the borrower to cancel all or a portion of the loan, in accordance with § 668.165(a)(2), (a)(3), (a)(4), and (a)(5).
(ii)(A) The institution must offer any amount of a post-withdrawal disbursement that is not credited to the student's account in accordance with paragraph (a)(4)(i) of this section to the student, or the parent in the case of a PLUS loan, within 30 days of the date of the institution's determination that the student withdrew, as defined in paragraph (l)(3) of this section, by providing a written notification to the student, or parent in the case of PLUS loan funds. The written notification must—
(
(
(
(B) If the student or parent submits a timely response that instructs the institution to make all or a portion of
(C) If the student or parent does not respond to the institution's notice, no portion of the post-withdrawal disbursement that is not credited to the student's account in accordance with paragraph (a)(4)(i) of this section may be disbursed.
(D) If a student or parent submits a late response to the institution's notice, the institution may make the post-withdrawal disbursement as instructed by the student or parent or decline to do so.
(E) If a student or parent submits a late response to the institution and the institution does not choose to make the post-withdrawal disbursement in accordance with paragraph (a)(4)(ii)(D) of this section, the institution must inform the student or parent electronically or in writing concerning the outcome of the post-withdrawal disbursement request.
(iii) A post-withdrawal disbursement must be made from available grant funds before available loan funds.
(b)
(2) An institution must document a student's withdrawal date determined in accordance with paragraph (b)(1) of this section and maintain the documentation as of the date of the institution's determination that the student withdrew, as defined in paragraph (l)(3) of this section.
(3)(i) An institution is required to take attendance if an outside entity (such as the institution's accrediting agency or a State agency) has a requirement, as determined by the entity, that the institution take attendance.
(ii) If an outside entity requires an institution to take attendance for only some students, the institution must use its attendance records to determine a withdrawal date in accordance with paragraph (b)(1) of this section for those students.
(c)
(i) The date, as determined by the institution, that the student began the withdrawal process prescribed by the institution;
(ii) The date, as determined by the institution, that the student otherwise provided official notification to the institution, in writing or orally, of his or her intent to withdraw;
(iii) If the student ceases attendance without providing official notification to the institution of his or her withdrawal in accordance with paragraph (c)(1)(i) or (c)(1)(ii) of this section, the mid-point of the payment period (or period of enrollment, if applicable);
(iv) If the institution determines that a student did not begin the institution's withdrawal process or otherwise provide official notification (including notice from an individual acting on the student's behalf) to the institution of his or her intent to withdraw because of illness, accident, grievous personal loss, or other such circumstances beyond the student's control, the date that the institution determines is related to that circumstance;
(v) If a student does not return from an approved leave of absence as defined in paragraph (d) of this section, the date that the institution determines the student began the leave of absence; or
(vi) If a student takes a leave of absence that does not meet the requirements of paragraph (d) of this section, the date that the student began the leave of absence.
(2)(i)(A) An institution may allow a student to rescind his or her official notification to withdraw under paragraph (c)(1)(i) or (ii) of this section by filing a written statement that he or she is continuing to participate in academically-related activities and intends to complete the payment period or period of enrollment.
(B) If the student subsequently ceases to attend the institution prior to the end of the payment period or period of enrollment, the student's rescission is negated and the withdrawal date is the student's original date under paragraph (c)(1)(i) or (ii) of this section, unless a later date is determined under paragraph (c)(3) of this section.
(ii) If a student both begins the withdrawal process prescribed by the institution and otherwise provides official notification of his or her intent to withdraw in accordance with paragraphs (c)(1)(i) and (c)(1)(ii) of this section respectively, the student's withdrawal date is the earlier date unless a later date is determined under paragraph (c)(3) of this section.
(3)(i) Notwithstanding paragraphs (c)(1) and (2) of this section, an institution that is not required to take attendance may use as the student's withdrawal date a student's last date of attendance at an academically-related activity provided that the institution documents that the activity is academically related and documents the student's attendance at the activity.
(ii) An “academically-related activity” includes, but is not limited to, an exam, a tutorial, computer-assisted instruction, academic counseling, academic advisement, turning in a class assignment or attending a study group that is assigned by the institution.
(4) An institution must document a student's withdrawal date determined in accordance with paragraphs (c)(1), (2), and (3) of this section and maintain the documentation as of the date of the institution's determination that the student withdrew, as defined in paragraph (l)(3) of this section.
(5)(i) “Official notification to the institution” is a notice of intent to withdraw that a student provides to an office designated by the institution.
(ii) An institution must designate one or more offices at the institution that a student may readily contact to provide official notification of withdrawal.
(d)
(i) The institution has a formal policy regarding leaves of absence;
(ii) The student followed the institution's policy in requesting the leave of absence;
(iii) The institution determines that there is a reasonable expectation that the student will return to the school;
(iv) The institution approved the student's request in accordance with the institution's policy;
(v) The leave of absence does not involve additional charges by the institution;
(vi) The number of days in the approved leave of absence, when added to the number of days in all other approved leaves of absence, does not exceed 180 days in any 12-month period;
(vii) Except for a clock hour or nonterm credit hour program, upon the student's return from the leave of absence, the student is permitted to complete the coursework he or she began prior to the leave of absence; and
(viii) If the student is a title IV, HEA program loan recipient, the institution explains to the student, prior to granting the leave of absence, the effects that the student's failure to return from a leave of absence may have on the student's loan repayment terms, including the exhaustion of some or all of the student's grace period.
(2) If a student does not resume attendance at the institution at or before the end of a leave of absence that meets the requirements of this section, the institution must treat the student as a withdrawal in accordance with the requirements of this section.
(3) For purposes of this paragraph—
(i) The number of days in a leave of absence is counted beginning with the
(ii) A “12-month period” begins on the first day of the student's initial leave of absence.
(iii) An institution's leave of absence policy is a “formal policy” if the policy—
(A) Is in writing and publicized to students; and
(B) Requires students to provide a written, signed, and dated request, that includes the reason for the request, for a leave of absence prior to the leave of absence. However, if unforeseen circumstances prevent a student from providing a prior written request, the institution may grant the student's request for a leave of absence, if the institution documents its decision and collects the written request at a later date.
(e)
(i) Determining the percentage of title IV grant or loan assistance that has been earned by the student, as described in paragraph (e)(2) of this section; and
(ii) Applying this percentage to the total amount of title IV grant or loan assistance that was disbursed (and that could have been disbursed, as defined in paragraph (l)(1) of this section) to the student, or on the student's behalf, for the payment period or period of enrollment as of the student's withdrawal date.
(2)
(i) Equal to the percentage of the payment period or period of enrollment that the student completed (as determined in accordance with paragraph (f) of this section) as of the student's withdrawal date, if this date occurs on or before completion of 60 percent of the—
(A) Payment period or period of enrollment for a program that is measured in credit hours; or
(B) Clock hours scheduled to be completed for the payment period or period of enrollment for a program that is measured in clock hours; or
(ii) 100 percent, if the student's withdrawal date occurs after completion of 60 percent of the—
(A) Payment period or period of enrollment for a program that is measured in credit hours; or
(B) Clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours.
(3)
(4)
(5)
(ii)(A) The treatment of title IV grant or loan funds if a student withdraws may be determined on either a payment period basis or a period of enrollment basis for a student who attended a non-term based educational program or a nonstandard term-based educational program.
(B) An institution must consistently use either a payment period or period of enrollment for all purposes of this section for each of the following categories of students who withdraw from the same non-term based or nonstandard term-based educational program:
(
(
(
(f)
(i) In the case of a program that is measured in credit hours, by dividing the total number of calendar days in the payment period or period of enrollment into the number of calendar days completed in that period as of the student's withdrawal date; and
(ii) In the case of a program that is measured in clock hours, by dividing the total number of clock hours in the payment period or period of enrollment into the number of clock hours—
(A) Completed by the student in that period as of the student's withdrawal date; or
(B) Scheduled to be completed as of the student's withdrawal date, if the clock hours completed in the period are not less than 70 percent of the hours that were scheduled to be completed by the student as of the student's withdrawal date.
(2)(i) The total number of calendar days in a payment period or period of enrollment includes all days within the period, except that scheduled breaks of at least five consecutive days are excluded from the total number of calendar days in a payment period or period of enrollment and the number of calendar days completed in that period.
(ii) The total number of calendar days in a payment period or period of enrollment does not include days in which the student was on an approved leave of absence.
(g)
(i) The total amount of unearned title IV assistance to be returned as calculated under paragraph (e)(4) of this section; or
(ii) An amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of title IV grant or loan assistance that has not been earned by the student, as described in paragraph (e)(3) of this section.
(2) For purposes of this section, “institutional charges” are tuition, fees, room and board (if the student contracts with the institution for the room and board) and other educationally-related expenses assessed by the institution.
(3) If, for a non-term program an institution chooses to calculate the treatment of title IV assistance on a payment period basis, but the institution charges for a period that is longer than the payment period, “total institutional charges incurred by the student for the payment period” is the greater of—
(i) The prorated amount of institutional charges for the longer period; or
(ii) The amount of title IV assistance retained for institutional charges as of the student's withdrawal date.
(h)
(2) The amount of assistance that the student is responsible for returning is calculated by subtracting the amount of unearned aid that the institution is required to return under paragraph (g) of this section from the total amount of unearned title IV assistance to be returned under paragraph (e)(4) of this section.
(3) The student (or parent in the case of funds due to a PLUS Loan) must return or repay, as appropriate, the amount determined under paragraph (h)(1) of this section to—
(i) Any title IV loan program in accordance with the terms of the loan; and
(ii) Any title IV grant program as an overpayment of the grant; however, a student is not required to return 50 percent of the grant assistance that is the responsibility of the student to repay under this section.
(4)(i) A student who owes an overpayment under this section remains eligible for title IV, HEA program funds through and beyond the earlier of 45 days from the date the institution sends a notification to the student of the overpayment, or 45 days from the date the institution was required to notify the student of the overpayment if, during those 45 days the student—
(A) Repays the overpayment in full to the institution;
(B) Enters into a repayment agreement with the institution in accordance with repayment arrangements satisfactory to the institution; or
(C) Signs a repayment agreement with the Secretary, which will include terms that permit a student to repay the overpayment while maintaining his or her eligibility for title IV, HEA program funds.
(ii) Within 30 days of the date of the institution's determination that the student withdrew, an institution must send a notice to any student who owes a title IV, HEA grant overpayment as a result of the student's withdrawal from the institution in order to recover the overpayment in accordance with paragraph (h)(4)(i) of this section.
(iii) If an institution chooses to enter into a repayment agreement in accordance with paragraph (h)(4)(i)(B) of this section with a student who owes an overpayment of title IV, HEA grant funds, it must—
(A) Provide the student with terms that permit the student to repay the overpayment while maintaining his or her eligibility for title IV, HEA program funds; and
(B) Require repayment of the full amount of the overpayment within two years of the date of the institution's determination that the student withdrew.
(iv) An institution must refer to the Secretary, in accordance with procedures required by the Secretary, an overpayment of title IV, HEA grant funds owed by a student as a result of the student's withdrawal from the institution if—
(A) The student does not repay the overpayment in full to the institution, or enter a repayment agreement with the institution or the Secretary in accordance with paragraph (h)(4)(i) of this section within the earlier of 45 days from the date the institution sends a notification to the student of the overpayment, or 45 days from the date the institution was required to notify the student of the overpayment;
(B) At any time the student fails to meet the terms of the repayment agreement with the institution entered into in accordance with paragraph (h)(4)(i)(B) of this section; or
(C) The student chooses to enter into a repayment agreement with the Secretary.
(v) A student who owes an overpayment is ineligible for title IV, HEA program funds—
(A) If the student does not meet the requirements in paragraph (h)(4)(i) of this section, on the day following the 45-day period in that paragraph; or
(B) As of the date the student fails to meet the terms of the repayment agreement with the institution or the Secretary entered into in accordance with paragraph (h)(4)(i) of this section.
(vi) A student who is ineligible under paragaraph (h)(4)(v) of this section regains eligibility if the student and the Secretary enter into a repayment agreement.
(i)
(i) Unsubsidized Federal Stafford loans.
(ii) Subsidized Federal Stafford loans.
(iii) Unsubsidized Federal Direct Stafford loans.
(iv) Subsidized Federal Direct Stafford loans.
(v) Federal Perkins loans.
(vi) Federal PLUS loans received on behalf of the student.
(vii) Federal Direct PLUS received on behalf of the student.
(2)
(i) Federal Pell Grants.
(ii) Federal SEOG Program aid.
(iii) Other grant or loan assistance authorized by title IV of the HEA.
(j)
(2) An institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the—
(i) Payment period or period of enrollment, as appropriate, in accordance with paragraph (e)(5) of this section;
(ii) Academic year in which the student withdrew; or
(iii) Educational program from which the student withdrew.
(k)
(l)
(1) Title IV grant or loan funds that “could have been disbursed” are determined in accordance with the late disbursement provisions in § 668.164(g).
(2) A “period of enrollment” is the academic period established by the institution for which institutional charges are generally assessed (i.e. length of the student's program or academic year).
(3) The “date of the institution's determination that the student withdrew” is—
(i) For a student who provides notification to the institution of his or her withdrawal, the student's withdrawal date as determined under paragraph (c) of this section or the date of notification of withdrawal, whichever is later;
(ii) For a student who did not provide notification of his of her withdrawal to the institution, the date that the institution becomes aware that the student ceased attendance;
(iii) For a student who does not return from an approved leave of absence, the earlier of the date of the end of the leave of absence or the date the student notifies the institution that he or she will not be returning to the institution; or
(iv) For a student whose rescission is negated under paragraph (c)(2)(i)(B) of this section, the date the institution becomes aware that the student did not, or will not, complete the payment period or period of enrollment.
(v) For a student who takes a leave of absence that is not approved in accordance with paragraph (d) of this section, the date that the student begins the leave of absence.
(4) A “recipient of title IV grant or loan assistance” is a student for whom the requirements of § 668.164(g)(2) have been met.
(a)
(2)
(3)
(4)
(5)
(b)
(2) The compliance audit required under this section must be conducted in accordance with—
(i) The general standards and the standards for compliance audits contained in the U.S. General Accounting Office's (GAO's) Government Auditing Standards. (This publication is available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402); and
(ii) Procedures for audits contained in audit guides developed by, and available from, the Department of Education's Office of Inspector General.
(3) The Secretary may require an institution to provide a copy of its compliance audit report to guaranty agencies or eligible lenders under the FFEL programs, State agencies, the Secretary of Veterans Affairs, or nationally recognized accrediting agencies.
(c)
(i) The servicer contracts with only one institution; and
(ii) The audit of that institution's administration of the title IV, HEA programs involves every aspect of the servicer's administration of that program for that institution.
(2) A third-party servicer that contracts with more than one participating institution may submit a compliance audit report that covers the servicer's administration of the title IV, HEA programs for all institutions with which the servicer contracts.
(3) A third-party servicer must submit annually to the Secretary its compliance audit no later than six months after the last day of the servicer's fiscal year.
(4) The Secretary may require a third-party servicer to provide a copy of its compliance audit report to guaranty agencies or eligible lenders under the FFEL programs, State agencies, the Secretary of Veterans Affairs, or nationally recognized accrediting agencies.
(d)
(2)
(3)
(i) Audited financial statements prepared in accordance with the generally accepted accounting principles of the institution's home country, if the institution received less than $500,000 U.S. in title IV, HEA program funds during its most recently completed fiscal year; or
(ii) Audited financial statements translated to meet the requirements of paragraph (d) of this section, if the institution received $500,000 U.S. or more in title IV, HEA program funds during its most recently completed fiscal year.
(4)
(5)
(e)
(i) Give the Secretary and the Inspector General access to records or other documents necessary to review that audit, including the right to obtain copies of those records or documents; and
(ii) Require an individual or firm conducting the audit to give the Secretary and the Inspector General access to records, audit work papers, or other documents necessary to review that audit, including the right to obtain copies of those records, work papers, or documents.
(2) An institution must give the Secretary and the Inspector General access to records or other documents necessary to review a third-party servicer's compliance or financial
(f)
(2) If the Secretary determines that a third-party servicer owes a liability for its administration of an institution's title IV, HEA programs, the servicer must notify each institution under whose contract the servicer owes a liability of that determination. The servicer must also notify every institution that contracts with the servicer for the same service that the Secretary determined that a liability was owed.
(g)
(i) The institution or servicer files an appeal under the procedures established in subpart H of this part; or
(ii) The Secretary permits a longer repayment period.
(2) Notwithstanding paragraphs (f) and (g)(1) of this section—
(i) If an institution or third-party servicer has posted surety or has provided a third-party guarantee and the Secretary questions expenditures or compliance with applicable requirements and identifies liabilities, then the Secretary may determine that deferring recourse to the surety or guarantee is not appropriate because—
(A) The need to provide relief to students or borrowers affected by the act or omission giving rise to the liability outweighs the importance of deferring collection action until completion of available appeal proceedings; or
(B) The terms of the surety or guarantee do not provide complete assurance that recourse to that protection will be fully available through the completion of available appeal proceedings; or
(ii) The Secretary may use administrative offset pursuant to 34 CFR part 30 to collect the funds owed under the procedures of this section.
(3) If, under the proceedings in subpart H, liabilities asserted in the Secretary's notification, under paragraph (e)(1) of this section, to the institution or third-party servicer are upheld, the institution or third-party servicer must repay those funds at the direction of the Secretary within 30 days of the final decision under subpart H of this part unless—
(i) The Secretary permits a longer repayment period; or
(ii) The Secretary determines that earlier collection action is appropriate pursuant to paragraph (g)(2) of this section.
(4) An institution is held responsible for any liability owed by the institution's third-party servicer for a violation incurred in servicing any aspect of that institution's participation in the title IV, HEA programs and remains responsible for that amount until that amount is repaid in full.
(a)
(1) Its eligibility to participate in the title IV, HEA programs;
(2) The eligibility of its educational programs for title IV, HEA program funds;
(3) Its administration of the title IV, HEA programs in accordance with all applicable requirements;
(4) Its financial responsibility, as specified in this part;
(5) Information included in any application for title IV, HEA program funds; and
(6) Its disbursement and delivery of title IV, HEA program funds.
(b)
(2) An institution shall establish and maintain on a current basis—
(i) Financial records that reflect each HEA, title IV program transaction; and
(ii) General ledger control accounts and related subsidiary accounts that identify each title IV, HEA program transaction and separate those transactions from all other institutional financial activity.
(c)
(i) The Student Aid Report (SAR) or Institutional Student Information Record (ISIR) used to determine eligibility for title IV, HEA program funds;
(ii) Application data submitted to the Secretary, lender, or guaranty agency by the institution on behalf of the student or parent;
(iii) Documentation of each student's or parent borrower's eligibility for title IV, HEA program funds;
(iv) Documentation relating to each student's or parent borrower's receipt of title IV, HEA program funds, including but not limited to documentation of—
(A) The amount of the grant, loan, or FWS award; its payment period; its loan period, if appropriate; and the calculations used to determine the amount of the grant, loan, or FWS award;
(B) The date and amount of each disbursement or delivery of grant or loan funds, and the date and amount of each payment of FWS wages;
(C) The amount, date, and basis of the institution's calculation of any refunds or overpayments due to or on behalf of the student, or the treatment of title IV, HEA program funds when a student withdraws; and
(D) The payment of any overpayment or the return of any title IV, HEA program funds to the title IV, HEA program fund, a lender, or the Secretary, as appropriate;
(v) Documentation of and information collected at any initial or exit loan counseling required by applicable program regulations;
(vi) Reports and forms used by the institution in its participation in a title IV, HEA program, and any records needed to verify data that appear in those reports and forms; and
(vii) Documentation supporting the institution's calculations of its completion or graduation rates under §§ 668.46 and 668.49.
(2) In addition to the records required under this part—
(i) Participants in the Federal Perkins Loan Program shall follow procedures established in 34 CFR 674.19 for documentation of repayment history for that program;
(ii) Participants in the FWS Program shall follow procedures established in 34 CFR 675.19 for documentation of work, earnings, and payroll transactions for that program; and
(iii) Participants in the FFEL Program shall follow procedures established in 34 CFR 682.610 for documentation of additional loan record requirements for that program.
(d)
(2) An institution shall make its records readily available for review by the Secretary or the Secretary's authorized representative at an institutional location designated by the Secretary or the Secretary's authorized representative.
(3) An institution may keep required records in hard copy or in microform, computer file, optical disk, CD-ROM, or other media formats, provided that—
(i) Except for the records described in paragraph (d)(3)(ii) of this section, all record information must be retrievable in a coherent hard copy format or in other media formats acceptable to the Secretary;
(ii) An institution shall maintain the Student Aid Report (SAR) or Institutional Student Information Record (ISIR) used to determine eligibility for title IV, HEA program funds in the format in which it was received by the institution, except that the SAR may be maintained in an imaged media format;
(iii) Any imaged media format used to maintain required records must be capable of reproducing an accurate, legible, and complete copy of the original document, and, when printed, this copy must be approximately the same size as the original document;
(iv) Any document that contains a signature, seal, certification, or any other image or mark required to validate the authenticity of its information must be maintained in its original hard copy or in an imaged media format; and
(v) Participants in the Federal Perkins Loan Program shall follow procedures established in 34 CFR 674.19 for maintaining the original promissory notes and repayment schedules for that program.
(4) If an institution closes, stops providing educational programs, is terminated or suspended from the title IV, HEA programs, or undergoes a change of ownership that results in a change of control as described in 34 CFR 600.31, it shall provide for—
(i) The retention of required records; and
(ii) Access to those records, for inspection and copying, by the Secretary or the Secretary's authorized representative, and, for a school participating in the FFEL Program, the appropriate guaranty agency.
(e)
(1) An institution shall keep records relating to its administration of the Federal Perkins Loan, FWS, FSEOG, or Federal Pell Grant Program for three years after the end of the award year for which the aid was awarded and disbursed under those programs, provided that an institution shall keep—
(i) The Fiscal Operations Report and Application to Participate in the Federal Perkins Loan, FSEOG, and FWS Programs (FISAP), and any records necessary to support the data contained in the FISAP, including “income grid information,” for three years after the end of the award year in which the FISAP is submitted; and
(ii) Repayment records for a Federal Perkins loan, including records relating to cancellation and deferment requests, in accordance with the provisions of 34 CFR 674.19;
(2)(i) An institution shall keep records relating to a student or parent borrower's eligibility and participation in the FFEL or Direct Loan Program for three years after the end of the award year in which the student last attended the institution; and
(ii) An institution shall keep all other records relating to its participation in the FFEL or Direct Loan Program, including records of any other reports or forms, for three years after the end of the award year in which the records are submitted; and
(3) An institution shall keep all records involved in any loan, claim, or expenditure questioned by a title IV, HEA program audit, program review, investigation, or other review until the later of—
(i) The resolution of that questioned loan, claim, or expenditure; or
(ii) The end of the retention period applicable to the record.
(f)
(2) The institution and servicer must cooperate by—
(i) Providing timely access, for examination and copying, to requested records, including but not limited to computerized records and records reflecting transactions with any financial institution with which the institution or servicer deposits or has deposited any title IV, HEA program funds, and to any pertinent books, documents, papers, or computer programs; and
(ii) Providing reasonable access to personnel associated with the institution's or servicer's administration of the title IV, HEA programs for the purpose of obtaining relevant information.
(3) The Secretary considers that an institution or servicer has failed to
(i) Refuses to allow those personnel to supply all relevant information;
(ii) Permits interviews with those personnel only if the institution's or servicer's management is present; or
(iii) Permits interviews with those personnel only if the interviews are tape recorded by the institution or servicer.
(4) Upon request of the Secretary, or a lender or guaranty agency in the case of a borrower under the FFEL Program, an institution or servicer promptly shall provide the requester with any information the institution or servicer has respecting the last known address, full name, telephone number, enrollment information, employer, and employer address of a recipient of title IV funds who attends or attended the institution.
(a) An institution may enter into a written contract with a third-party servicer for the administration of any aspect of the institution's participation in any Title IV, HEA program only to the extent that the servicer's eligibility to contract with the institution has not been limited, suspended, or terminated under the proceedings of subpart G of this part.
(b) Subject to the provisions of paragraph (d) of this section, a third-party servicer is eligible to enter into a written contract with an institution for the administration of any aspect of the institution's participation in any Title IV, HEA program only to the extent that the servicer's eligibility to contract with the institution has not been limited, suspended, or terminated under the proceedings of subpart G of this part.
(c) In a contract with an institution, a third-party servicer shall agree to—
(1) Comply with all statutory provisions of or applicable to Title IV of the HEA, all regulatory provisions prescribed under that statutory authority, and all special arrangements, agreements, limitations, suspensions, and terminations entered into under the authority of statutes applicable to Title IV of the HEA, including the requirement to use any funds that the servicer administers under any Title IV, HEA program and any interest or other earnings thereon solely for the purposes specified in and in accordance with that program;
(2) Refer to the Office of Inspector General of the Department of Education for investigation any information indicating there is reasonable cause to believe that the institution might have engaged in fraud or other criminal misconduct in connection with the institution's administration of any Title IV, HEA program or an applicant for Title IV, HEA program assistance might have engaged in fraud or other criminal misconduct in connection with his or her application. Examples of the type of information that must be referred are—
(i) False claims by the institution for Title IV, HEA program assistance;
(ii) False claims of independent student status;
(iii) False claims of citizenship;
(iv) Use of false identities;
(v) Forgery of signatures or certifications; and
(vi) False statements of income;
(3) Be jointly and severally liable with the institution to the Secretary for any violation by the servicer of any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, and any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA;
(4) In the case of a third-party servicer that disburses funds (including funds received under the Title IV, HEA programs) or delivers Federal Stafford Loan Program proceeds to a student—
(i) Confirm the eligibility of the student before making that disbursement
(ii) Calculate and return any unearned title IV, HEA program funds to the title IV, HEA program accounts and the student's lender, as appropriate, in accordance with the provisions of §§ 668.21 and 668.22, and applicable program regulations; and
(5) If the servicer or institution terminates the contract, or if the servicer stops providing services for the administration of a Title IV, HEA program, goes out of business, or files a petition under the Bankruptcy Code, return to the institution all—
(i) Records in the servicer's possession pertaining to the institution's participation in the program or programs for which services are no longer provided; and
(ii) Funds, including Title IV, HEA program funds, received from or on behalf of the institution or the institution's students, for the purposes of the program or programs for which services are no longer provided.
(d) A third-party servicer may not enter into a written contract with an institution for the administration of any aspect of the institution's participation in any Title IV, HEA program, if—
(1)(i) The servicer has been limited, suspended, or terminated by the Secretary within the preceding five years;
(ii) The servicer has had, during the servicer's two most recent audits of the servicer's administration of the Title IV, HEA programs, an audit finding that resulted in the servicer's being required to repay an amount greater than five percent of the funds that the servicer administered under the Title IV, HEA programs for any award year; or
(iii) The servicer has been cited during the preceding five years for failure to submit audit reports required under Title IV of the HEA in a timely fashion; and
(2)(i) In the case of a third-party servicer that has been subjected to a termination action by the Secretary, either the servicer, or one or more persons or entities that the Secretary determines (under the provisions of § 668.15) exercise substantial control over the servicer, or both, have not submitted to the Secretary financial guarantees in an amount determined by the Secretary to be sufficient to satisfy the servicer's potential liabilities arising from the servicer's administration of the Title IV, HEA programs; and
(ii) One or more persons or entities that the Secretary determines (under the provisions of § 668.15) exercise substantial control over the servicer have not agreed to be jointly or severally liable for any liabilities arising from the servicer's administration of the Title IV, HEA programs and civil and criminal monetary penalties authorized under Title IV of the HEA.
(e)(1)(i) An institution that participates in a Title IV, HEA program shall notify the Secretary within 10 days of the date that—
(A) The institution enters into a new contract or significantly modifies an existing contract with a third-party servicer to administer any aspect of that program;
(B) The institution or a third-party servicer terminates a contract for the servicer to administer any aspect of that program; or
(C) A third-party servicer that administers any aspect of the institution's participation in that program stops providing services for the administration of that program, goes out of business, or files a petition under the Bankruptcy Code.
(ii) The institution's notification must include the name and address of the servicer.
(2) An institution that contracts with a third-party servicer to administer any aspect of the institution's participation in a Title IV, HEA program shall provide to the Secretary, upon request, a copy of the contract, including any modifications, and provide information pertaining to the contract or to
(a) An institution's participation in a Title IV, HEA program ends on the date that—
(1) The institution closes or stops providing educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution or the institution's students;
(2) The institution loses its institutional eligibility under 34 CFR part 600;
(3) The institution's participation is terminated under the proceedings in subpart G of this part;
(4) The institution's period of participation, as specified under § 668.13, expires, or the institution's provisional certification is revoked under § 668.13;
(5) The institution's program participation agreement is terminated or expires under § 668.14;
(6) The institution's participation ends under subpart M of this part; or
(7) The Secretary receives a notice from the appropriate State postsecondary review entity designated under 34 CFR part 667 that the institution's participation should be withdrawn.
(b) If an institution's participation in a Title IV, HEA program ends, the institution shall—
(1) Immediately notify the Secretary of that fact;
(2) Submit to the Secretary within 45 days after the date that the participation ends—
(i) All financial, performance, and other reports required by appropriate Title IV, HEA program regulations; and
(ii) A letter of engagement for an independent audit of all funds that the institution received under that program, the report of which shall be submitted to the Secretary within 45 days after the date of the engagement letter;
(3) Inform the Secretary of the arrangements that the institution has made for the proper retention and storage for a minimum of three years of all records concerning the administration of that program;
(4) If the institution's participation in the Federal Perkins Loan Program ended, inform the Secretary of how the institution will provide for the collection of any outstanding loans made under that program;
(5) If the institution's participation in the NEISP or LEAP Program ended—
(i) Inform immediately the State in which the institution is located of that fact; and
(ii) Notwithstanding paragraphs (c) through (e) of this section, follow the instructions of that State concerning the end of that participation;
(6) If the institution's participation in all the Title IV, HEA programs ended, inform the Secretary of how the institution will provide for the collection of any outstanding loans made under the National Defense/Direct Student Loan programs; and
(7) Continue to comply with the requirements of § 668.22 for the treatment of title IV, HEA program funds when a student withdraws.
(c) If an institution closes or stops providing educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution or the institution's students, the institution shall—
(1) Return to the Secretary, or otherwise dispose of under instructions from the Secretary, any unexpended funds that the institution has received under the Title IV, HEA programs for attendance at the institution, less the institution's administrative allowance, if applicable; and
(2) Return to the appropriate lenders any Federal Stafford Loan program proceeds that the institution has received but not delivered to, or credited to the accounts of, students attending the institution.
(d)(1) An institution may use funds that it has received under the Federal
(i) The institution's participation in that Title IV, HEA program ends during a payment period;
(ii) The institution continues to provide, from the date that the participation ends until the scheduled completion date of that payment period, educational programs to otherwise eligible students enrolled in the formerly eligible programs of the institution;
(iii) The commitment was made prior to the end of the participation; and
(iv) The commitment was made for attendance during that payment period or a previously completed payment period.
(2) An institution may credit to a student's account or deliver to the student the proceeds of a disbursement of a Federal Family Education Loan Programs loan to satisfy any unpaid commitment made to the student under the Federal Family Education Loan Programs Loan Program only if—
(i) The institution's participation in that Title IV, HEA program ends during a period of enrollment;
(ii) The institution continues to provide, from the date that the participation ends until the scheduled completion date of that period of enrollment, educational programs to otherwise eligible students enrolled in the formerly eligible programs of the institution;
(iii) The commitment was made prior to the end of the participation;
(iv) The commitment was made for attendance during that period of enrollment; and
(v) The proceeds of the first disbursement of the loan were delivered to the student or credited to the student's account prior to the end of the participation.
(3) An institution may use funds that it has received under the Direct Loan Program or request additional funds from the Secretary, under conditions specified by the Secretary, if the institution does not possess sufficient funds, to credit to a student's account or disburse to the student the proceeds of a Direct Loan Program loan only if—
(i) The institution's participation in the Direct Loan Program ends during a period of enrollment;
(ii) The institution continues to provide, from the date that the participation ends until the scheduled completion date of that period of enrollment, educational programs to otherwise eligible students enrolled in the formerly eligible programs of the institution;
(iii) The loan was made for attendance during that period of enrollment; and
(iv) The proceeds of the first disbursement of the loan were delivered to the student or credited to the student's account prior to the end of the participation.
(e) For the purposes of this section—
(1) A commitment under the Federal Pell Grant and PAS programs occurs when a student is enrolled and attending the institution and has submitted a valid Student Aid Report to the institution or when an institution has received a valid institutional student information report;
(2) A commitment under the campus-based programs occurs when a student is enrolled and attending the institution and has received a notice from the institution of the amount that he or she can expect to receive and how and when that amount will be paid; and
(3) A commitment under the Federal Stafford and Federal SLS programs occurs when the Secretary or a guaranty agency notifies the lender that the loan is guaranteed.
(a)
(2) An institution requesting a waiver must submit an application to the Secretary at such time and in such manner as the Secretary prescribes.
(3) The first fiscal year for which an institution may request a waiver is the fiscal year in which it submits its waiver request to the Secretary.
(b)
(i) The end of the third fiscal year following the fiscal year for which the institution last submitted a compliance audit and audited financial statement; or
(ii) The end of the second fiscal year following the fiscal year for which the institution last submitted compliance and financial statement audits if the award year in which the institution will apply for recertification is part of the third fiscal year.
(2) The Secretary does not grant a waiver if the award year in which the institution will apply for recertification is part of the second fiscal year following the fiscal year for which the institution last submitted compliance and financial statement audits.
(3) When an institution must submit its next compliance and financial statement audits under paragraph (b)(1) of this section—
(i) The institution must submit a compliance audit that covers the institution's administration of the title IV, HEA programs for the period for each fiscal year for which an audit did not have to be submitted as a result of the waiver, and an audited financial statement for its last fiscal year; and
(ii) The auditor who conducts the audit must audit the institution's annual determinations for the period subject to the waiver that it satisfied the 90/10 rule in § 600.5 and the other conditions of institutional eligibility in § 600.7 and § 668.8(e)(2), and disclose the results of the audit of the 90/10 rule for each year in accordance with § 668.23(d)(4).
(c)
(1) Is not a foreign institution;
(2) Did not disburse $200,000 or more of title IV, HEA program funds during each of the two completed award years preceding the institution's waiver request;
(3) Agrees to keep records relating to each award year in the unaudited period for two years after the end of the record retention period in § 668.24(e) for that award year;
(4) Has participated in the title IV, HEA programs under the same ownership for at least three award years preceding the institution's waiver request;
(5) Is financially responsible under § 668.171, and does not rely on the alternative standards of § 668.175 to participate in the title IV, HEA programs;
(6) Is not on the reimbursement or cash monitoring system of payment;
(7) Has not been the subject of a limitation, suspension, fine, or termination proceeding, or emergency action initiated by the Department or a guarantee agency in the three years preceding the institution's waiver request;
(8) Has submitted its compliance audits and audited financial statements for the previous two fiscal years in accordance with and subject to § 668.23, and no individual audit disclosed liabilities in excess of $10,000; and
(9) Submits a letter of credit in the amount determined in paragraph (d) of this section, which must remain in effect until the Secretary has resolved the audit covering the award years subject to the waiver.
(d)
(e)
(i) Disburses $200,000 or more of title IV, HEA program funds for an award year;
(ii) Undergoes a change in ownership that results in a change of control; or
(iii) Becomes the subject of an emergency action or a limitation, suspension, fine, or termination action initiated by the Department or a guarantee agency.
(2) If the Secretary rescinds a waiver, the rescission is effective on the last day of the fiscal year in which the rescission takes place.
(f)
(a) The Third general standard for governmental auditing is: In matters relating to the audit work, the audit organization and the individual auditors shall maintain an independent attitude.
(b) This standard places upon the auditor and the audit organization the responsibility for maintaining sufficient independence so that their opinions, conclusions, judgments, and recommendations will be impartial. If the auditor is not sufficiently independent to produce unbiased opinions, conclusions, and judgments, he should state in a prominent place in the audit report his relationship with the organization or officials being audited.
(c) The auditor should consider not only whether his or her own attitude and beliefs permit him or her to be independent but also whether there is anything about his or her situation which would lead others to question his or her independence. Both situations deserve consideration since it is important not only that the auditor be, in fact, independent and impartial but also that other persons will consider him or her so.
(d) There are three general classes of impairments that the auditor needs to consider; these are personal, external, and organizational impairments. If one or more of these are of such significance as to affect the auditor's ability to perform his or her work and report its results impartially, he or she should decline to perform the audit or indicate in the report that he or she was not fully independent.
There are some circumstances in which an auditor cannot be impartial because of his or her views or his or her personal situation. These circumstances might include:
1. Relationships of an official, professional, and/or personal nature that might cause the auditor to limit the extent or character of the inquiry, to limit disclosure, or to weaken his or her findings in any way.
2. Preconceived ideas about the objectives or quality of a particular operation or personal likes or dislikes of individuals, groups, or objectives of a particular program.
3. Previous involvement in a decisionmaking or management capacity in the operations of the governmental entity or program being audited.
4. Biases and prejudices, including those induced by political or social convictions, which result from employment in or loyalty to a particular group, entity, or level of government.
5. Actual or potential restrictive influence when the auditor performs preaudit work and subsequently performs a post audit.
6. Financial interest, direct or indirect, in an organization or facility which is benefiting from the audited programs.
External factors can restrict the audit or impinge on the auditor's ability to form independent and objective opinions and conclusions. For example, under the following conditions either the audit itself could be adversely affected or the auditor would not have complete freedom to make an independent judgment.
1. Interference or other influence that improperly or imprudently eliminates, restricts, or modifies the scope or character of the audit.
2. Interference with the selection or application of audit procedures of the selection of activities to be examined.
3. Denial of access to such sources of information as books, records, and supporting documents or denial or opportunity to obtain explanations by officials and employees
4. Interference in the assignment of personnel to the audit task.
5. Retaliatory restrictions placed on funds or other resources dedicated to the audit operation.
6. Activity to overrule or significantly influence the auditors judgment as to the appropriate content of the audit report.
7. Influences that place the auditor's continued employment in jeopardy for reasons other than competency or the need for audit services.
8. Unreasonable restriction on the time allowed to competently complete an audit assignment.
(a) The auditor's independence can be affected by his or her place within the organizational structure of governments. Auditors employed by Federal, State, or local government units may be subject to policy direction from superiors who are involved either directly or indirectly in the government management process. To achieve maximum independence such auditors and the audit organization itself not only should report to the highest practicable echelon within their government but should be organizationally located outside the line-management function of the entity under audit.
(b) These auditors should also be sufficiently removed from political pressures to ensure that they can conduct their auditing objectively and can report their conclusions completely without fear of censure. Whenever feasible they should be under a system which will place decisions on compensation, training, job tenure, and advancement on a merit basis.
(c) When independent public accountants or other independent professionals are engaged to perform work that includes inquiries into compliance with applicable laws and regulations, efficiency and economy of operations, or achievement of program results, they should be engaged by someone other than the officials responsible for the direction of the effort being audited. This practice removes the pressure that may result if the auditor must criticize the performance of those by whom he or she was engaged. To remove this obstacle to independence, governments should arrange to have auditors engaged by officials not directly involved in operations to be audited.
(a) When outside auditors are engaged for assignments requiring the expression of an opinion on financial reports of governmental organizations, only fully qualified public accountants should be employed. The type of qualifications, as stated by the Comptroller General, deemed necessary for financial audits of governmental organizations and programs is quoted below:
“Such audits shall be conducted * * * by independent certified public accountants or by independent licensed public accountants, licensed on or before December 31, 1970, who are certified or licensed by a regulatory authority of a State or other political subdivision of the United States: Except that independent public accountants licensed to practice by such regulatory authority after December 31, 1970, and persons who although not so certified or licensed, meet, in the opinion of the Secretary, standards of education and experience representative of the highest prescribed by the licensing authorities of the several States which provide for the continuing licensing of public accountants and which are prescribed by the Secretary in appropriate regulations may perform such audits until December 31, 1975; Provided, That if the Secretary deems it necessary in the public interest, he may prescribe by regulations higher standard than those required for the practice of public accountancy by the regulatory authorities of the States.”
(b) The standards for examination and evaluation require consideration of applicable laws and regulations in the auditor's examination. The standards for reporting require a statement in the auditor's report regarding any significant instances of noncompliance disclosed by his or her examination and evaluation work. What is to be included in this statement requires judgment. Significant instances of noncompliance, even those not resulting in legal liability to the audited entity, should be included. Minor procedural noncompliance need not be disclosed.
(c) Although the reporting standard is generally on an exception basis—that only noncompliance need be reported—it should be recognized that governmental entities often want positive statements regarding whether or not the auditor's tests disclosed instances of noncompliance. This is particularly true in grant programs where authorizing agencies frequently want assurance in the auditor's report that this matter has been considered. For such audits, auditors should obtain an understanding with the authorizing agency as to the extent to which such positive comments on compliance are desired. When coordinated audits are involved, the audit program should specify the extent of comments that the auditor is to make regarding compliance.
(d) When noncompliance is reported, the auditor should place the findings in proper perspective. The extent of instances of noncompliance should be related to the number of cases examined to provide the reader with a basis for judging the prevalence of noncompliance.
This subpart contains rules by which a student establishes eligibility for assistance under the title IV, HEA programs. In order to qualify as an eligible student, a student must meet all applicable requirements in this subpart.
A student is eligible to receive title IV, HEA program assistance if the student—
(a)(1) (i) Is a regular student enrolled, or accepted for enrollment, in an eligible program at an eligible institution;
(ii) For purposes of the FFEL and Direct Loan programs, is enrolled for no longer than one twelve-month period in a course of study necessary for enrollment in an eligible program; or
(iii) For purposes of the Federal Perkins Loan, FWS, FFEL, and Direct Loan programs, is enrolled or accepted for enrollment as at least a half-time student at an eligible institution in a program necessary for a professional credential or certification from a State that is required for employment as a teacher in an elementary or secondary school in that State;
(2) For purposes of the FFEL and Direct Loan programs, is at least a half-time student;
(b) Is not enrolled in either an elementary or secondary school;
(c)(1) For purposes of the FSEOG Program, does not have a baccalaureate or first professional degree;
(2) For purposes of the Federal Pell Grant Program—
(i)(A) Does not have a baccalaureate or first professional degree; or
(B) Is enrolled in a postbaccalaureate teacher certificate or licensing program as described in 34 CFR 690.6(c); and
(ii) Is not incarcerated in a Federal or State penal institution; and
(3) For purposes of the Federal Perkins Loan, FFEL, and Direct Loan programs, is not incarcerated;
(d) Satisfies the citizenship and residency requirements contained in § 668.33 and subpart I of this part;
(e)(1) Has a high school diploma or its recognized equivalent;
(2) Has obtained a passing score specified by the Secretary on an independently administered test in accordance with subpart J of this part;
(3) Is enrolled in an eligible institution that participates in a State “process” approved by the Secretary under subpart J of this part; or
(4) Was home-schooled, and either—
(i) Obtained a secondary school completion credential for home school (other than a high school diploma or its recognized equivalent) provided for under State law; or
(ii) If State law does not require a home-schooled student to obtain the credential described in paragraph (e)(4)(i) of this section, has completed a secondary school education in a home school setting that qualifies as an exemption from compulsory attendance requirements under State law;
(f) Maintains satisfactory progress in his or her course of study according to the institution's published standards of satisfactory progress that satisfy the provisions of § 668.16(e), and, if applicable, the provisions of § 668.34;
(g) Except as provided in § 668.35—
(1) Is not in default, and certifies that he or she is not in default, on a loan made under any title IV, HEA loan program;
(2) Has not obtained loan amounts that exceed annual or aggregate loan limits made under any title IV, HEA loan program;
(3) Does not have property subject to a judgment lien for a debt owed to the United States; and
(4) Is not liable for a grant or Federal Perkins loan overpayment. A student receives a grant or Federal Perkins loan overpayment if the student received grant or Federal Perkins loan payments that exceeded the amount he or she was eligible to receive; or if the student withdraws, that exceeded the amount he or she was entitled to receive for non-institutional charges;
(h) Files a Statement of Educational Purpose in accordance with the instructions of the Secretary;
(i) Has a correct social security number as determined under § 668.36, except that this requirement does not apply to students who are residents of the Federated States of Micronesia, Republic of the Marshall Islands, or the Republic of Palau;
(j) Satisfies the Selective Service registration requirements contained in § 668.37, and, if applicable, satisfies the requirements of § 668.38 and § 668.39 involving enrollment in telecommunication and correspondence courses and a study abroad program, respectively;
(k) Satisfies the program specific requirements contained in—
(1) 34 CFR 674.9 for the Federal Perkins Loan program;
(2) 34 CFR 675.9 for the FWS program;
(3) 34 CFR 676.9 for the FSEOG program;
(4) 34 CFR 682.201 for the FFEL programs;
(5) 34 CFR 685.200 for the William D. Ford Federal Direct Loan programs;
(6) 34 CFR 690.75 for the Federal Pell Grant program; and
(7) 34 CFR 692.40 for the LEAP program; and
(l) Is not ineligible under § 668.40.
(a) Except as provided in paragraph (b) of this section, to be eligible to receive title IV, HEA program assistance, a student must—
(1) Be a citizen or national of the United States; or
(2) Provide evidence from the U.S. Immigration and Naturalization Service that he or she—
(i) Is a permanent resident of the United States; or
(ii) Is in the United States for other than a temporary purpose with the intention of becoming a citizen or permanent resident;
(b)(1) A citizen of the Federated States of Micronesia, Republic of the Marshall Islands, or the Republic of Palau is eligible to receive funds under the FWS, FSEOG, and Federal Pell Grant programs if the student attends an eligible institution in a State, or a public or nonprofit private eligible institution of higher education in those jurisdictions.
(2) A student who satisfies the requirements of paragraph (a) of this section is eligible to receive funds under the FWS, FSEOG, and Federal Pell Grant programs if the student attends a public or nonprofit private eligible institution of higher education in the Federated States of Micronesia, Republic of the Marshall Islands, or the Republic of Palau.
(c)(1) If a student asserts that he or she is a citizen of the United States on the Free Application for Federal Student Aid (FAFSA), the Secretary attempts to confirm that assertion under a data match with the Social Security Administration. If the Social Security Administration confirms the student's citizenship, the Secretary reports that confirmation to the institution and the student.
(2) If the Social Security Administration does not confirm the student's citizenship assertion under the data match with the Secretary, the student can establish U.S. citizenship by submitting documentary evidence of that status to the institution. Before denying title IV, HEA assistance to a student for failing to establish citizenship, an institution must give a student at
(a) If a student is enrolled in an program of study of more than two academic years, to be eligible to receive title IV, HEA program assistance after the second year, in addition to satisfying the requirements contained in § 668.32(f), the student must be making satisfactory under the provisions of paragraphs (b), (c) and (d) of this section.
(b) A student is making satisfactory progress if, at the end of the second year, the student has a grade point average of at least a “C” or its equivalent, or has academic standing consistent with the institution's requirements for graduation.
(c) An institution may find that a student is making satisfactory progress even though the student does not satisfy the requirements in paragraph (b) of this section, if the institution determines that the student's failure to meet those requirements is based upon—
(1) The death of a relative of the student;
(2) An injury or illness of the student; or
(3) Other special circumstances.
(d) If a student is not making satisfactory progress at the end of the second year, but at the end of a subsequent grading period comes into compliance with the institution's requirements for graduation, the institution may consider the student as making satisfactory progress beginning with the next grading period.
(e) At a minimum, an institution must review a student's academic progress at the end of each year.
(a) A student who is in default on a loan made under a title IV, HEA loan program may nevertheless be eligible to receive title IV, HEA program assistance if the student—
(1) Repays the loan in full; or
(2) Except as limited by paragraph (c) of this section—
(i) Makes arrangements, that are satisfactory to the holder of the loan and in accordance with the individual title IV, HEA loan program regulations, to repay the loan balance; and
(ii) Makes at least six consecutive monthly payments under those arrangements.
(b) A student who is subject to a judgment for failure to repay a loan made under a title IV, HEA loan program may nevertheless be eligible to receive title IV, HEA program assistance if the student—
(1) Repays the debt in full; or
(2) Except as limited by paragraph (c) of this section—
(i) Makes repayment arrangements that are satisfactory to the holder of the debt; and
(ii) Makes at least six consecutive, voluntary monthly payments under those arrangements. Voluntary payments are those payments made directly by the borrower, and do not include payments obtained by Federal offset, garnishment, or income or asset execution.
(c) A student who reestablishes eligibility under either paragraph (a)(2) of this section or paragraph (b)(2) of this section may not reestablish eligibility again under either of those paragraphs.
(d) A student who is not in default on a loan made under a title IV, HEA loan program, but has inadvertently obtained loan funds under a title IV, HEA loan program in an amount that exceeds the annual or aggregate loan limits under that program, may nevertheless be eligible to receive title IV, HEA program assistance if the student—
(1) Repays in full the excess loan amount; or
(2) Makes arrangements, satisfactory to the holder of the loan, to repay that excess loan amount.
(e) A student who receives an overpayment under the Federal Perkins Loan Program, or under a title IV, HEA grant program may nevertheless be eligible to receive title IV, HEA program assistance if—
(1) The student pays the overpayment in full;
(2) The student makes arrangements satisfactory to the holder of the overpayment debt to pay the overpayment; or
(3) The overpayment amount is less than $25 and is neither a remaining balance nor a result of the application of the overaward threshold in 34 CFR 673.5(d).
(f) A student who has property subject to a judgement lien for a debt owed to the United States may nevertheless be eligible to receive title IV, HEA program assistance if the student-
(1) Pays the debt in full; or
(2) Makes arrangements, satisfactory to the United States, to pay the debt.
(g) (1) A student is not liable for a Federal Pell Grant overpayment received in an award year if the institution can eliminate that overpayment by adjusting subsequent Federal Pell Grant payments in that same award year.
(2) A student is not liable for a FSEOG or LEAP overpayment or Federal Perkins loan overpayment received in an award year if the institution can eliminate that overpayment by adjusting subsequent title IV, HEA program (other than Federal Pell Grant) payments in that same award year.
(h) A student who otherwise is in default on a loan made under a title IV, HEA loan program, or who otherwise owes an overpayment on a title IV, HEA program grant or Federal Perkins loan, is not considered to be in default or owe an overpayment if the student—
(1) Obtains a judicial determination that the debt has been discharged or is dischargeable in bankruptcy; or
(2) Demonstrates to the satisfaction of the holder of the debt that—
(i) When the student filed the petition for bankruptcy relief, the loan, or demand for the payment of the overpayment, had been outstanding for the period required under 11 U.S.C. 523(a)(8)(A), exclusive of applicable suspensions of the repayment period for either debt of the kind defined in 34 CFR 682.402(m); and
(ii) The debt otherwise qualifies for discharge under applicable bankruptcy law.
(a)(1) Except for residents of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau, the Secretary attempts to confirm the social security number a student provides on the Free Application for Federal Student Aid (FAFSA) under a data match with the Social Security Administration. If the Social Security Administration confirms that number, the Secretary notifies the institution and the student of that confirmation.
(2) If the student's verified social security number is the same number as the one he or she provided on the FAFSA, and the institution has no reason to believe that the verified social security number is inaccurate, the institution may consider the number to be accurate.
(3) If the Social Security Administration does not verify the student's social security number on the FAFSA, or the institution has reason to believe that the verified social security number is inaccurate, the student can provide evidence to the institution, such as the student's social security card, indicating the accuracy of the student's social security number. An institution must give a student at least 30 days, or until the end of the award year, whichever is later, to produce that evidence.
(4) An institution may not deny, reduce, delay, or terminate a student's eligibility for assistance under the title IV, HEA programs because verification of that student's social security number is pending.
(b)(1) An institution may not disburse any title IV, HEA program funds to a student until the institution is satisfied that the student's reported social security number is accurate.
(2) The institution shall ensure that the Secretary is notified of the student's accurate social security number if the student demonstrates the accuracy of a social security number that is not the number the student included on the FAFSA.
(c) If the Secretary determines that the social security number provided to an institution by a student is incorrect, and that student has not provided evidence under paragraph (a)(3) of this section indicating the accuracy of the social security number, and a loan has been guaranteed for the student under the FFEL program, the institution shall notify and instruct the lender and guaranty agency making and guaranteeing the loan, respectively, to cease further disbursements of the loan, until the Secretary or the institution determines that the social security number provided by the student is correct, but the guaranty may not be voided or otherwise nullified before the date that the lender and the guaranty agency receive the notice.
(d) Nothing in this section permits the Secretary to take any compliance, disallowance, penalty or other regulatory action against—
(1) Any institution of higher education with respect to any error in a social security number, unless the error was the result of fraud on the part of the institution; or
(2) Any student with respect to any error in a social security number, unless the error was the result of fraud on the part of the student.
(a)(1) To be eligible to receive title IV, HEA program funds, a male student who is subject to registration with the Selective Service must register with the Selective Service.
(2) A male student does not have to register with the Selective Service if the student—
(i) Is below the age of 18, or was born before January 1, 1960;
(ii) Is enrolled in an officer procurement program the curriculum of which has been approved by the Secretary of Defense at the following institutions:
(A) The Citadel, Charleston, South Carolina;
(B) North Georgia College, Dahlonega, Georgia;
(C) Norwich University, Northfield, Vermont; or
(D) Virginia Military Institute, Lexington, Virginia; or
(iii) Is a commissioned officer of the Public Health Service or a member of the Reserve of the Public Health Service who is on active duty as provided in section 6(a)(2) of the Military Selective Service Act.
(b)(1) When the Secretary processes a male student's FAFSA, the Secretary determines whether the student is registered with the Selective Service under a data match with the Selective Service.
(2) Under the data match, Selective Service reports to the Secretary whether its records indicate that the student is registered, and the Secretary reports the results of the data match to the student and the institution the student is attending.
(c)(1) If the Selective Service does not confirm through the data match, that the student is registered, the student can establish that he—
(i) Is registered;
(ii) Is not, or was not required to be, registered;
(iii) Has registered since the submission of the FAFSA; or
(iv) Meets the conditions of paragraph (d) of this section.
(2) An institution must give a student at least 30 days, or until the end of the award year, whichever is later, to provide evidence to establish the condition described in paragraph (c)(1) of this section.
(d) An institution may determine that a student, who was required to, but did not register with the Selective Service, is not ineligible to receive title IV, HEA assistance for that reason, if the student can demonstrate by submitting clear and unambiguous evidence to the institution that—
(1) He was unable to present himself for registration for reasons beyond his control such as hospitalization, incarceration, or institutionalization; or
(2) He is over 26 and when he was between 18 and 26 and required to register—
(i) He did not knowingly and willfully fail to register with the Selective Service; or
(ii) He served as a member of one of the U.S. Armed Forces on active duty and received a DD Form 214, “Certificate of Release or Discharge from Active Duty,” showing military service with other than the reserve forces and National Guard.
(e) For purposes of paragraph (d)(2)(i) of this section, an institution may consider that a student did not knowingly and willfully fail to register with the Selective Service only if—
(1) The student submits to the institution an advisory opinion from the Selective Service System that does not dispute the student's claim that he did not knowingly and willfully fail to register; and
(2) The institution does not have uncontroverted evidence that the student knowingly and willfully failed to register.
(f)(1) A student who is required to register with the Selective Service and has been denied title IV, HEA program assistance because he has not proven to the institution that he has registered with Selective Service may seek a hearing from the Secretary by filing a request in writing with the Secretary. The student must submit with that request—
(i) A statement that he is in compliance with registration requirements;
(ii) A concise statement of the reasons why he has not been able to prove that he is in compliance with those requirements; and
(iii) Copies of all material that he has already supplied to the institution to verify his compliance.
(2) The Secretary provides an opportunity for a hearing to a student who—
(i) Asserts that he is in compliance with registration requirements; and
(ii) Files a written request for a hearing in accordance with paragraph (f)(1) of this section within the award year for which he was denied title IV, HEA program assistance or within 30 days following the end of the payment period, whichever is later.
(3) An official designated by the Secretary shall conduct any hearing held under paragraph (f)(2) of this section. The sole purpose of this hearing is the determination of compliance with registration requirements. At this hearing, the student retains the burden of proving compliance, by credible evidence, with the requirements of the Military Selective Service Act. The designated official shall not consider challenges based on constitutional or other grounds to the requirements that a student state and verify, if required, compliance with registration requirements, or to those registration requirements themselves.
(g) Any determination of compliance made under this section is final unless reopened by the Secretary and revised on the basis of additional evidence.
(h) Any determination of compliance made under this section is binding only for purposes of determining eligibility for title IV, HEA program assistance.
(a) If a student is enrolled in correspondence courses, the student is eligible to receive title IV, HEA program assistance only if the correspondence courses are part of a program that leads to an associate, bachelor's, or graduate degree.
(b)(1) For purposes of this section, a student enrolled in a telecommunications course at an institution of higher education is not enrolled in a correspondence course, if—
(i) The student is enrolled in a program that leads to a certificate for a program of study of 1 year or longer, or an associate, bachelor, or graduate degree; and
(ii) The number of telecommunications and correspondence courses the institution offered during its latest completed award year was fewer than 50 percent of all the courses the institution offered during that same year.
(2) For purposes of paragraph (b)(1) of this section, an institution of higher education is one—
(i) That is not an institute or school described in section 521(4)(C) of the Carl D. Perkins Vocational and Applied Technology Act; and
(ii) At which at least 50 percent of the programs of study offered by the institution during its latest completed award year led to an associate, bachelor, or graduate degree.
(3) For purposes of paragraph (b)(1)(ii) of this section, the institution must calculate the number of courses using the provisions contained in 34 CFR 600.7(b)(2).
A student enrolled in a program of study abroad is eligible to receive title IV, HEA program assistance if—
(a) The student remains enrolled as a regular student in an eligible program at an eligible institution during his or her program of study abroad; and
(b) The eligible institution approves the program of study abroad for academic credit. However, the study abroad program need not be required as part of the student's eligible degree program.
(a)(1) A student is ineligible to receive title IV, HEA program funds if the student has been convicted of an offense involving the possession or sale of illegal drugs for the period described in paragraph (b) of this section. However, the student may regain eligibility before that period expires under the conditions described in paragraph (c) of this section.
(2) For purposes of this section, a conviction means only a conviction that is on a student's record. A conviction that was reversed, set aside, or removed from the student's record is not relevant for purposes of this section, nor is a determination or adjudication arising out of a juvenile proceeding.
(3) For purposes of this section, an illegal drug is a controlled substance as defined by section 102(6) of the Controlled Substances Act (21 U.S.C. 801(6)), and does not include alcohol or tobacco.
(b)(1)
(i) Only one time for possession of illegal drugs, the student is ineligible to receive title IV, HEA program funds for one year after the date of conviction;
(ii) Two times for possession of illegal drugs, the student is ineligible to receive title IV, HEA program funds for two years after the date of the second conviction; or
(iii) Three or more times for possession of illegal drugs, the student is ineligible to receive title IV, HEA program funds for an indefinite period after the date of the third conviction.
(2)
(i) Only one time for sale of illegal drugs, the student is ineligible to receive title IV, HEA program funds for two years after the date of conviction; or
(ii) Two or more times for sale of illegal drugs, the student is ineligible to receive Title IV, HEA program funds for an indefinite period after the date of the second conviction.
(c) If a student successfully completes a drug rehabilitation program described in paragraph (d) of this section after the student's most recent drug conviction, the student regains eligibility on the date the student successfully completes the program.
(d) A drug rehabilitation program referred to in paragraph (c) of this section is one which—
(1) Includes at least two unannounced drug tests; and
(2)(i) Has received or is qualified to receive funds directly or indirectly under a Federal, State, or local government program;
(ii) Is administered or recognized by a Federal, State, or local government agency or court;
(iii) Has received or is qualified to receive payment directly or indirectly from a Federally- or State-licensed insurance company; or
(iv) Is administered or recognized by a Federally- or State-licensed hospital, health clinic or medical doctor.
(a)
(b)
(1) Enrolled students or current employees by posting the information on an Internet website or an Intranet website that is reasonably accessible to the individuals to whom the information must be disclosed; and
(2) Prospective students or prospective employees by posting the information on an Internet website.
(c)
(2) An institution that discloses information to enrolled students as required under paragraph (d), (e), or (g) of this section by posting the information on an Internet website or an Intranet website must include in the notice described in paragraph (c)(1) of this section—
(i) The exact electronic address at which the information is posted; and
(ii) A statement that the institution will provide a paper copy of the information on request.
(d)
(1) Financial assistance available to students enrolled in the institution (pursuant to § 668.42);
(2) The institution (pursuant to § 668.43); and
(3) The institution's completion or graduation rate and, if applicable, its transfer-out rate (pursuant to § 668.45). In the case of a request from a prospective student, the information must be made available prior to the student's enrolling or entering into any financial obligation with the institution.
(e)
(i) Direct mailing to each individual through the U.S. Postal Service, campus mail, or electronic mail;
(ii) A publication or publications provided directly to each individual; or
(iii) Posting on an Internet website or an Intranet website, subject to paragraphs (e)(2) and (3) of this section.
(2)
(3)
(4)
(5)
(f)
(1)(i) Except under the circumstances described in paragraph (f)(1)(ii) of this section, when an institution offers a prospective student-athlete athletically related student aid, it must provide to the prospective student-athlete, and his or her parents, high school coach, and guidance counselor, the report produced pursuant to § 668.48(a).
(ii) An institution's responsibility under paragraph (f)(1)(i) of this section with reference to a prospective student athlete's high school coach and guidance counselor is satisfied if—
(A) The institution is a member of a national collegiate athletic association;
(B) The association compiles data on behalf of its member institutions, which data the Secretary determines are substantially comparable to those required by § 668.48(a); and
(C) The association distributes the compilation to all secondary schools in the United States.
(2) By July 1 of each year, an institution must submit to the Secretary the report produced pursuant to § 668.48.
(g)
(ii) The institution must provide notice to all enrolled students, pursuant to paragraph (c)(1) of this section, and prospective students of their right to request the report described in paragraph (g)(1) of this section. If the institution chooses to make the report available by posting the disclosure on an Internet website or an Intranet website, it must provide in the notice the exact electronic address at which the report is posted, a brief description of the report, and a statement that the institution will provide a paper copy of the report on request. For prospective students, the institution may not use an Intranet website for this purpose.
(2) An institution must submit the report described in paragraph (g)(1)(i) of this section to the Secretary within 15 days of making it available to students, prospective students, and the public.
(a)(1) Information on financial assistance that the institution must publish and make readily available to current and prospective student's under this subpart includes, but is not limited to, a description of all the Federal, State, local, private and institutional student financial assistance programs available to students who enroll at that institution.
(2) These programs include both need-based and non-need-based programs.
(3) The institution may describe its own financial assistance programs by listing them in general categories.
(b) For each program referred to in paragraph (a) of this section, the information provided by the institution must describe—
(1) The procedures and forms by which students apply for assistance;
(2) The student eligibility requirements;
(3) The criteria for selecting recipients from the group of eligible applicants; and
(4) The criteria for determining the amount of a student's award.
(c) The institution shall describe the rights and responsibilities of students receiving financial assistance and, specifically, assistance under the title IV, HEA programs. This description must include specific information regarding—
(1) Criteria for continued student eligibility under each program;
(2)(i) Standards which the student must maintain in order to be considered to be making satisfactory progress in his or her course of study for the purpose of receiving financial assistance; and
(ii) Criteria by which the student who has failed to maintain satisfactory progress may re-establish his or her eligibility for financial assistance;
(3) The method by which financial assistance disbursements will be made to the students and the frequency of those disbursements;
(4) The terms of any loan received by a student as part of the student's financial assistance package, a sample loan repayment schedule for sample loans and the necessity for repaying loans;
(5) The general conditions and terms applicable to any employment provided to a student as part of the student's financial assistance package;
(6) The institution shall provide and collect exit counseling information as required by 34 CFR 674.42 for borrowers under the Federal Perkins Loan Program, by 34 CFR 685.304 for borrowers
(7) The terms and conditions under which students receiving Federal Family Education Loan or William D. Ford Federal Direct Loan assistance may obtain deferral of the repayment of the principal and interest of the loan for—
(i) Service under the Peace Corps Act (22 U.S.C. 2501);
(ii) Service under the Domestic Volunteer Service Act of 1973 (42 U.S.C. 4951); or
(iii) Comparable service as a volunteer for a tax-exempt organization of demonstrated effectiveness in the field of community service.
(a) Institutional information that the institution must make readily available upon request to enrolled and prospective students under this subpart includes, but is not limited to—
(1) The cost of attending the institution, including—
(i) Tuition and fees charged to full-time and part-time students;
(ii) Estimates of costs for necessary books and supplies;
(iii) Estimates of typical charges for room and board;
(iv) Estimates of transportation costs for students; and
(v) Any additional cost of a program in which a student is enrolled or expresses a specific interest;
(2) Any refund policy with which the institution is required to comply for the return of unearned tuition and fees or other refundable portions of costs paid to the institution;
(3) The requirements and procedures for officially withdrawing from the institution;
(4) A summary of the requirements under § 668.22 for the return of title IV grant or loan assistance;
(5) The academic program of the institution, including—
(i) The current degree programs and other educational and training programs;
(ii) The instructional, laboratory, and other physical facilities which relate to the academic program; and
(iii) The institution's faculty and other instructional personnel;
(6) The names of associations, agencies or governmental bodies that accredit, approve, or license the institution and its programs and the procedures by which documents describing that activity may be reviewed under paragraph (b) of this section;
(7) A description of any special facilities and services available to disabled students;
(8) The titles of persons designated under § 668.44 and information regarding how and where those persons may be contacted; and
(9) A statement that a student's enrollment in a program of study abroad approved for credit by the home institution may be considered enrollment at the home institution for the purpose of applying for assistance under the title IV, HEA programs.
(b) The institution must make available for review to any enrolled or prospective student, upon request, a copy of the documents describing the institution's accreditation, approval or licensing.
(a)
(2) If the institution designates one person, that person shall be available, upon reasonable notice, to any enrolled or prospective student throughout the normal administrative working hours of that institution.
(3) If more than one person is designated, their combined work schedules must be arranged so that at least one of them is available, upon reasonable notice, throughout the normal administrative working hours of that institution.
(b)
(2) In determining whether an institution's total enrollment or the number of title IV, HEA program recipients is too small, the Secretary considers whether there will be an insufficient demand for information dissemination services among its enrolled or prospective students to necessitate the full-time availability of an employee or group of employees.
(3) To receive a waiver, the institution shall apply to the Secretary at the time and in the manner prescribed by the Secretary.
(c) The granting of a waiver under paragraph (b) of this section does not exempt an institution from designating a specific employee or group of employees to carry out on a part-time basis the information dissemination requirements.
(a)(1) An institution annually must prepare the completion or graduation rate of its certificate- or degree-seeking, full-time undergraduate students, as provided in paragraph (b) of this section.
(2) An institution that determines that its mission includes providing substantial preparation for students to enroll in another eligible institution must prepare the transfer-out rate of its certificate- or degree-seeking, full-time undergraduate students, as provided in paragraph (c) of this section.
(3)(i) An institution that offers a predominant number of its programs based on semesters, trimesters, or quarters must base its completion or graduation rate and, if applicable, transfer-out rate calculations, on the cohort of first-time, certificate- or degree-seeking, full-time undergraduate students who enter the institution during the fall term of each year.
(ii) An institution not covered by the provisions of paragraph (a)(3)(i) of this section must base its completion or graduation rate and, if applicable, transfer-out rate calculations, on the group of certificate- or degree-seeking, full-time undergraduate students who enter the institution between September 1 of one year and August 31 of the following year.
(iii) For purposes of the completion or graduation rate and, if applicable, transfer-out rate calculations required in paragraph (a) of this section, an institution must count as entering students only first-time undergraduate students, as defined in § 668.41(a).
(4)(i) An institution covered by the provisions of paragraph (a)(3)(i) of this section must count as an entering student a first-time undergraduate student who is enrolled as of October 15, the end of the institution's drop-add period, or another official reporting date as defined in § 668.41(a).
(ii) An institution covered by paragraph (a)(3)(ii) of this section must count as an entering student a first-time undergraduate student who is enrolled for at least—
(A) 15 days, in a program of up to, and including, one year in length; or
(B) 30 days, in a program of greater than one year in length.
(5) An institution must make available its completion or graduation rate and, if applicable, transfer-out rate, no later than the July 1 immediately following the 12-month period ending August 31 during which 150% of the normal time for completion or graduation has elapsed for all of the students in the group on which the institution bases its completion or graduation rate and, if applicable, transfer-out rate calculations.
(b) In calculating the completion or graduation rate under paragraph (a)(1)
(1) Students who have completed or graduated by the end of the 12-month period ending August 31 during which 150% of the normal time for completion or graduation from their program has lapsed; and
(2) Students who have completed a program described in § 668.8(b)(1)(ii), or an equivalent program, by the end of the 12-month period ending August 31 during which 150% of normal time for completion from that program has lapsed.
(c) In calculating the transfer-out rate under paragraph (a)(2) of this section, an institution must count as transfers-out students who by the end of the 12-month period ending August 31 during which 150% of the normal time for completion or graduation from the program in which they were enrolled has lapsed, have not completed or graduated but have subsequently enrolled in any program of an eligible institution for which its program provided substantial preparation.
(d) For the purpose of calculating a completion or graduation rate and a transfer-out rate, an institution may exclude students who—
(1) Have left school to serve in the Armed Forces;
(2) Have left school to serve on official church missions;
(3) Have left school to serve with a foreign aid service of the Federal Government, such as the Peace Corps;
(4) Are totally and permanently disabled; or
(5) Are deceased.
(e)(1) The Secretary grants a waiver of the requirements of this section to any institution that is a member of an athletic association or conference that has voluntarily published completion or graduation rate data, or has agreed to publish data, that the Secretary determines are substantially comparable to the data required by this section.
(2) An institution that receives a waiver of the requirements of this section must still comply with the requirements of § 668.41(d)(3) and (f).
(3) An institution, or athletic association or conference applying on behalf of an institution, that seeks a waiver under paragraph (e)(1) of this section must submit a written application to the Secretary that explains why it believes the data the athletic association or conference publishes are accurate and substantially comparable to the information required by this section.
(f) In addition to calculating the completion or graduation rate required by paragraph (a)(1) of this section, an institution may, but is not required to—
(1) Calculate a completion or graduation rate for students who transfer into the institution;
(2) Calculate a completion or graduation rate and transfer-out rate for students described in paragraphs (d)(1) through (4) of this section; and
(3) Calculate a transfer-out rate as specified in paragraph (c) of this section, if the institution determines that its mission does not include providing substantial preparation for its students to enroll in another eligible institution.
(a)
(2) Any building or property that is within or reasonably contiguous to the area identified in paragraph (1) of this definition, that is owned by the institution but controlled by another person, is frequently used by students, and supports institutional purposes (such as a food or other retail vendor).
(2) Any individual or individuals who have responsibility for campus security but who do not constitute a campus police department or a campus security department under paragraph (1) of this definition, such as an individual who is responsible for monitoring entrance into institutional property.
(3) Any individual or organization specified in an institution's statement of campus security policy as an individual or organization to which students and employees should report criminal offenses.
(4) An official of an institution who has significant responsibility for student and campus activities, including, but not limited to, student housing, student discipline, and campus judicial proceedings. If such an official is a pastoral or professional counselor as defined below, the official is not considered a campus security authority when acting as a pastoral or professional counselor.
(2) Any building or property owned or controlled by an institution that is used in direct support of, or in relation to, the institution's educational purposes, is frequently used by students, and is not within the same reasonably contiguous geographic area of the institution.
(b)
(1) The crime statistics described in paragraph (c) of this section.
(2) A statement of current campus policies regarding procedures for students and others to report criminal actions or other emergencies occurring on campus. This statement must include the institution's policies concerning its response to these reports, including—
(i) Policies for making timely warning reports to members of the campus community regarding the occurrence of crimes described in paragraph (c)(1) of this section;
(ii) Policies for preparing the annual disclosure of crime statistics; and
(iii) A list of the titles of each person or organization to whom students and employees should report the criminal offenses described in paragraph (c)(1) of this section for the purpose of making timely warning reports and the annual statistical disclosure. This statement must also disclose whether the institution has any policies or procedures that allow victims or witnesses to report crimes on a voluntary, confidential basis for inclusion in the annual disclosure of crime statistics, and, if so, a description of those policies and procedures.
(3) A statement of current policies concerning security of and access to campus facilities, including campus residences, and security considerations used in the maintenance of campus facilities.
(4) A statement of current policies concerning campus law enforcement that—
(i) Addresses the enforcement authority of security personnel, including their relationship with State and local police agencies and whether those security personnel have the authority to arrest individuals;
(ii) Encourages accurate and prompt reporting of all crimes to the campus
(iii) Describes procedures, if any, that encourage pastoral counselors and professional counselors, if and when they deem it appropriate, to inform the persons they are counseling of any procedures to report crimes on a voluntary, confidential basis for inclusion in the annual disclosure of crime statistics.
(5) A description of the type and frequency of programs designed to inform students and employees about campus security procedures and practices and to encourage students and employees to be responsible for their own security and the security of others.
(6) A description of programs designed to inform students and employees about the prevention of crimes.
(7) A statement of policy concerning the monitoring and recording through local police agencies of criminal activity in which students engaged at off-campus locations of student organizations officially recognized by the institution, including student organizations with off-campus housing facilities.
(8) A statement of policy regarding the possession, use, and sale of alcoholic beverages and enforcement of State underage drinking laws.
(9) A statement of policy regarding the possession, use, and sale of illegal drugs and enforcement of Federal and State drug laws.
(10) A description of any drug or alcohol-abuse education programs, as required under section 120(a) through (d) of the HEA. For the purpose of meeting this requirement, an institution may cross-reference the materials the institution uses to comply with section 120(a) through (d) of the HEA.
(11) A statement of policy regarding the institution's campus sexual assault programs to prevent sex offenses, and procedures to follow when a sex offense occurs. The statement must include—
(i) A description of educational programs to promote the awareness of rape, acquaintance rape, and other forcible and nonforcible sex offenses;
(ii) Procedures students should follow if a sex offense occurs, including procedures concerning who should be contacted, the importance of preserving evidence for the proof of a criminal offense, and to whom the alleged offense should be reported;
(iii) Information on a student's option to notify appropriate law enforcement authorities, including on-campus and local police, and a statement that institutional personnel will assist the student in notifying these authorities, if the student requests the assistance of these personnel;
(iv) Notification to students of existing on- and off-campus counseling, mental health, or other student services for victims of sex offenses;
(v) Notification to students that the institution will change a victim's academic and living situations after an alleged sex offense and of the options for those changes, if those changes are requested by the victim and are reasonably available;
(vi) Procedures for campus disciplinary action in cases of an alleged sex offense, including a clear statement that—
(A) The accuser and the accused are entitled to the same opportunities to have others present during a disciplinary proceeding; and
(B) Both the accuser and the accused must be informed of the outcome of any institutional disciplinary proceeding brought alleging a sex offense. Compliance with this paragraph does not constitute a violation of the Family Educational Rights and Privacy Act (20 U.S.C. 1232g). For the purpose of this paragraph, the outcome of a disciplinary proceeding means only the institution's final determination with respect to the alleged sex offense and any sanction that is imposed against the accused; and
(vii) Sanctions the institution may impose following a final determination of an institutional disciplinary proceeding regarding rape, acquaintance rape, or other forcible or nonforcible sex offenses.
(12) Beginning with the annual security report distributed by October 1, 2003, a statement advising the campus community where law enforcement agency information provided by a State under section 170101(j) of the Violent Crime Control and Law Enforcement Act of 1994 (42 U.S.C. 14071(j)), concerning registered sex offenders
(c)
(i) Criminal homicide:
(A) Murder and nonnegligent manslaughter.
(B) Negligent manslaughter.
(ii) Sex offenses:
(A) Forcible sex offenses.
(B) Nonforcible sex offenses.
(iii) Robbery.
(iv) Aggravated assault.
(v) Burglary.
(vi) Motor vehicle theft.
(vii) Arson.
(viii) (A) Arrests for liquor law violations, drug law violations, and illegal weapons possession.
(B) Persons not included in paragraph (c)(1)(viii)(A) of this section, who were referred for campus disciplinary action for liquor law violations, drug law violations, and illegal weapons possession.
(2)
(3)
(4)
(i) On campus.
(ii) Of the crimes in paragraph (c)(4)(i) of this section, the number of crimes that took place in dormitories or other residential facilities for students on campus.
(iii) In or on a noncampus building or property.
(iv) On public property.
(5)
(6)
(7)
(8)
(9)
(d)
(e)
(i) Described in paragraph (c)(1) and (3) of this section;
(ii) Reported to campus security authorities as identified under the institution's statement of current campus policies pursuant to paragraph (b)(2) of this section or local police agencies; and
(iii) Considered by the institution to represent a threat to students and employees.
(2) An institution is not required to provide a timely warning with respect to crimes reported to a pastoral or professional counselor.
(f)
(i) The nature, date, time, and general location of each crime; and
(ii) The disposition of the complaint, if known.
(2) The institution must make an entry or an addition to an entry to the log within two business days, as defined under paragraph (a) of this section, of the report of the information to the campus police or the campus security department, unless that disclosure is prohibited by law or would jeopardize the confidentiality of the victim.
(3)(i) An institution may withhold information required under paragraphs (f)(1) and (2) of this section if there is clear and convincing evidence that the release of the information would—
(A) Jeopardize an ongoing criminal investigation or the safety of an individual;
(B) Cause a suspect to flee or evade detection; or
(C) Result in the destruction of evidence.
(ii) The institution must disclose any information withheld under paragraph (f)(3)(i) of this section once the adverse effect described in that paragraph is no longer likely to occur.
(4) An institution may withhold under paragraphs (f)(2) and (3) of this section only that information that would cause the adverse effects described in those paragraphs.
(5) The institution must make the crime log for the most recent 60-day period open to public inspection during normal business hours. The institution must make any portion of the log older than 60 days available within two business days of a request for public inspection.
(a)
(1) Participates in any title IV, HEA program; and
(2) Has an intercollegiate athletic program.
(b)
(1)
(ii)
(A) Lodging, meals, transportation, uniforms, and equipment for coaches, team members, support staff (including, but not limited to team managers and trainers), and others; and
(B) Officials.
(iii)
(2)
(3)(i)
(A) Are listed by the institution on the varsity team's roster;
(B) Receive athletically related student aid; or
(C) Practice with the varsity team and receive coaching from one or more varsity coaches.
(ii) Any student who satisfies one or more of the criteria in paragraphs (b)(3)(i)(A) through (C) of this section is a participant, including a student on a team the institution designates or defines as junior varsity, freshman, or novice, or a student withheld from competition to preserve eligibility (
(4)
(5)
(6)
(7)
(i) Is designated or defined by its institution or an athletic association as a varsity team; or
(ii) Primarily competes against other teams that are designated or defined by their institutions or athletic associations as varsity teams.
(c)
(1) The number of male and the number of female full-time undergraduate students that attended the institution.
(2) A listing of the varsity teams that competed in intercollegiate athletic competition and for each team the following data:
(i) The total number of participants as of the day of its first scheduled contest of the reporting year, the number of participants who also participated on another varsity team, and the number of other varsity teams on which they participated.
(ii) Total operating expenses attributable to the team, except that an institution may report combined operating expenses for closely related teams, such as track and field or swimming and diving. Those combinations must be reported separately for men's and women's teams.
(iii) In addition to the data required by paragraph (c)(2)(ii) of this section, an institution may report operating expenses attributable to the team on a per-participant basis.
(iv)(A) Whether the head coach was male or female, was assigned to the team on a full-time or part-time basis, and, if assigned on a part-time basis, whether the head coach was a full-time or part-time employee of the institution.
(B) The institution must consider graduate assistants and volunteers who served as head coaches to be head coaches for the purposes of this report.
(v)(A) The number of assistant coaches who were male and the number of assistant coaches who were female, and, within each category, the number who were assigned to the team on a full-time or part-time basis, and, of those assigned on a part-time basis, the number who were full-time and part-time employees of the institution.
(B) The institution must consider graduate assistants and volunteers who served as assistant coaches to be assistant coaches for purposes of this report.
(3) The unduplicated head count of the individuals who were listed under paragraph (c)(2)(i) of this section as a participant on at least one varsity team, by gender.
(4)(i) Revenues derived by the institution according to the following categories (Revenues not attributable to a particular sport or sports must be included only in the total revenues attributable to intercollegiate athletic activities, and, if appropriate, revenues attributable to men's sports combined or women's sports combined. Those revenues include, but are not limited to, alumni contributions to the athletic department not targeted to a particular sport or sports, investment interest income, and student activity fees.):
(A) Total revenues attributable to its intercollegiate athletic activities.
(B) Revenues attributable to all men's sports combined.
(C) Revenues attributable to all women's sports combined.
(D) Revenues attributable to football.
(E) Revenues attributable to men's basketball.
(F) Revenues attributable to women's basketball.
(G) Revenues attributable to all men's sports except football and basketball, combined.
(H) Revenues attributable to all women's sports except basketball, combined.
(ii) In addition to the data required by paragraph (c)(4)(i) of this section, an institution may report revenues attributable to the remainder of the teams, by team.
(5) Expenses incurred by the institution, according to the following categories (Expenses not attributable to a particular sport, such as general and administrative overhead, must be included only in the total expenses attributable to intercollegiate athletic activities.):
(i) Total expenses attributable to intercollegiate athletic activities.
(ii) Expenses attributable to football.
(iii) Expenses attributable to men's basketball.
(iv) Expenses attributable to women's basketball.
(v) Expenses attributable to all men's sports except football and basketball, combined.
(vi) Expenses attributable to all women's sports except basketball, combined.
(6) The total amount of money spent on athletically related student aid, including the value of waivers of educational expenses, aggregately for men's teams, and aggregately for women's teams.
(7) The ratio of athletically related student aid awarded male athletes to athletically related student aid awarded female athletes.
(8) The total amount of recruiting expenses incurred, aggregately for all men's teams, and aggregately for all women's teams.
(9)(i) The average annual institutional salary of the non-volunteer head coaches of all men's teams, across all offered sports, and the average annual institutional salary of the non-volunteer head coaches of all women's teams, across all offered sports, on a per person and a per full-time equivalent position basis. These data must include the number of persons and full-time equivalent positions used to calculate each average.
(ii) If a head coach has responsibilities for more than one team and the institution does not allocate that coach's salary by team, the institution must divide the salary by the number of teams for which the coach has responsibility and allocate the salary among the teams on a basis consistent with the coach's responsibilities for the different teams.
(10)(i) The average annual institutional salary of the non-volunteer assistant coaches of men's teams, across all offered sports, and the average annual institutional salary of the non-volunteer assistant coaches of women's teams, across all offered sports, on a per person and a full-time equivalent position basis. These data must include the number of persons and full-time equivalent positions used to calculate each average.
(ii) If an assistant coach had responsibilities for more than one team and the institution does not allocate that coach's salary by team, the institution must divide the salary by the number of teams for which the coach has responsibility and allocate the salary among the teams on a basis consistent with the coach's responsibilities for the different teams.
(a)(1) Annually, by July 1, an institution that is attended by students receiving athletically-related student aid must produce a report containing the following information:
(i) The number of students, categorized by race and gender, who attended that institution during the year prior to the submission of the report.
(ii) The number of students described in paragraph (a)(1)(i) of this section who received athletically-related student aid, categorized by race and gender within each sport.
(iii) The completion or graduation rate and if applicable, transfer-out rate of all the entering, certificate- or degree-seeking, full-time, undergraduate students described in § 668.45(a)(1), categorized by race and gender.
(iv) The completion or graduation rate and if applicable, transfer-out rate of the entering students described in § 668.45(a)(1) who received athletically-related student aid, categorized by race and gender within each sport.
(v) The average completion or graduation rate and if applicable, transfer-out rate for the four most recent completing or graduating classes of entering students described in § 668.45(a)(1), (3), and (4) categorized by race and gender. If an institution has completion or graduation rates and, if applicable, transfer-out rates for fewer than four of those classes, it must disclose the average rate of those classes for which it has rates.
(vi) The average completion or graduation rate and if applicable, transfer-out rate of the four most recent completing or graduating classes of entering students described in § 668.45 (a)(1) who received athletically-related student aid, categorized by race and gender within each sport. If an institution has completion or graduation rates and if applicable, transfer-out rates for fewer than four of those classes, it must disclose the average rate of those classes for which it has rates.
(2) For purposes of this section,
(i) Basketball;
(ii) Football;
(iii) Baseball;
(iv) Cross-country and track combined; and
(v) All other sports combined.
(3) If a category of students identified in paragraph (a)(1)(iv) above contains five or fewer students, the institution need not disclose information on that category of students.
(b) The provisions of § 668.45 (a), (b), (c), and (d) apply for purposes of calculating the completion or graduation rates and, if applicable, transfer-out rates required under paragraphs (a)(1)(iii) through (vi) of this section.
(c) Each institution of higher education described in paragraph (a) of this section may also provide to students and the Secretary supplemental information containing—
(1) The graduation or completion rate of the students who transferred into the institution; and
(2) The number of students who transferred out of the institution.
(d) The provisions of § 668.46(e) apply for purposes of this section.
The following definitions are to be used for reporting the crimes listed in § 668.47, in accordance with the Federal Bureau of Investigation's Uniform Crime Reporting Program. The definitions for
Any willful or malicious burning or attempt to burn, with or without intent to defraud, a dwelling house, public building, motor vehicle or aircraft, personal property of another, etc.
The killing of another person through gross negligence.
The willful (nonnegligent) killing of one human being by another.
The taking or attempting to take anything of value from the care, custody, or control of a person or persons by force or threat of force or violence and/or by putting the victim in fear.
An unlawful attack by one person upon another for the purpose of inflicting severe or aggravated bodily injury. This type of assault usually is accompanied by the use of a weapon or by means likely to produce death or great bodily harm. (It is not necessary that injury result from an aggravated assault when a gun, knife, or other weapon is used which could and probably would result in serious personal injury if the crime were successfully completed.)
The unlawful entry of a structure to commit a felony or a theft. For reporting purposes this definition includes: unlawful entry with intent to commit a larceny or felony; breaking and entering with intent to commit a larceny; housebreaking; safecracking; and all attempts to commit any of the aforementioned.
The theft or attempted theft of a motor vehicle. (Classify as motor vehicle theft all cases where automobiles are taken by persons not having lawful access even though the vehicles are later abandoned—including joyriding.)
The violation of laws or ordinances dealing with weapon offenses, regulatory in nature, such as: manufacture, sale, or possession of deadly weapons; carrying deadly weapons, concealed or openly; furnishing deadly weapons to minors; aliens possessing deadly weapons; and all attempts to commit any of the aforementioned.
Violations of State and local laws relating to the unlawful possession, sale, use, growing, manufacturing, and making of narcotic drugs. The relevant substances include: opium or cocaine and their derivatives (morphine, heroin, codeine); marijuana; synthetic narcotics (demerol, methadones); and dangerous nonnarcotic drugs (barbiturates, benzedrine).
The violation of laws or ordinances prohibiting: the manufacture, sale, transporting, furnishing, possessing of intoxicating liquor; maintaining unlawful drinking places; bootlegging; operating a still; furnishing liquor to a minor or intemperate person; using a vehicle for illegal transportation of liquor; drinking on a train or public conveyance; and all attempts to commit any of the aforementioned. (Drunkenness and driving under the influence are not included in this definition.)
Any sexual act directed against another person, forcibly and/or against that person's will; or not forcibly or against the person's will where the victim is incapable of giving consent.
A.
B.
C.
D.
Unlawful, nonforcible sexual intercourse.
A.
B.
(a)
(b)
(c)
The following definitions apply to this subpart:
(a) Student aid applications that may contain incorrect, missing, illogical, or inconsistent information; and
(b) Randomly selected student aid applications.
(a) An institution shall establish and use written policies and procedures for verifying information contained in a student aid application in accordance with the provisions of this subpart. These policies and procedures must include—
(1) The time period within which an applicant shall provide the documentation;
(2) The consequences of an applicant's failure to provide required documentation within the specified time period;
(3) The method by which the institution notifies an applicant of the results of verification if, as a result of verification, the applicant's EFC changes and results in a change in the applicant's award or loan;
(4) The procedures the institution requires an applicant to follow to correct application information determined to be in error; and
(5) The procedures for making referrals under § 668.16.
(b) The institution's procedures must provide that it shall furnish, in a timely manner, to each applicant selected for verification a clear explanation of—
(1) The documentation needed to satisfy the verification requirements; and
(2) The applicant's responsibilities with respect to the verification of application information, including the deadlines for completing any actions required under this subpart and the consequences of failing to complete any required action.
(a)
(2)(i) An institution shall require each applicant whose application is selected for verification on the basis of edits specified by the Secretary, to verify all of the applicable items specified in § 668.56, except that no institution is required to verify the applications of more than 30 percent of its total number of applicants for assistance under the Federal Pell Grant, Federal Direct Stafford/Ford Loan, campus-based, and Federal Stafford Loan programs in an award year.
(ii) An institution may only include those applicants selected for verification by the Secretary in its calculation of 30 percent of total applicants.
(3) If an institution has reason to believe that any information on an application used to calculate an EFC is inaccurate, it shall require the applicant to verify the information that it has reason to believe is inaccurate.
(4) If an applicant is selected to verify the information on his or her application under paragraph (a)(2) of this section, the institution shall require the applicant to verify the information as specified in § 668.56 on each additional application he or she submits for that award year, except for information already verified under a previous application submitted for the applicable award year.
(5) An institution or the Secretary may require an applicant to verify any data elements that the institution or the Secretary specifies.
(b)
(2) Unless the institution has reason to believe that the information reported by the applicant is incorrect, it need not verify applications of the following applicants:
(i) An applicant who is—
(A) A legal resident of and, in the case of a dependent student, whose parents are also legal residents of, the Commonwealth of the Northern Mariana Islands, Guam, or American Samoa; or
(B) A citizen of and, in the case of a dependent student, whose parents are also citizens of, the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau.
(ii) An applicant who is incarcerated at the time at which verification would occur.
(iii) An applicant who is a dependent student, whose parents are residing in a country other than the United States and cannot be contacted by normal means of communication.
(iv) An applicant who is an immigrant and who arrived in the United
(v) An applicant whose parents’ address is unknown and cannot be obtained by the applicant.
(vi) An applicant who is a dependent student, both of whose parents are deceased or are physically or mentally incapacitated.
(vii) An applicant who does not receive assistance for reasons other than his or her failure to verify the information on the application.
(viii) An applicant who transfers to the institution, had previously completed the verification process at the institution from which he or she transferred, and applies for assistance on the same application used at the previous institution, if the current institution obtains a letter from the previous institution stating that it has verified the applicant's information, the transaction number of the verified application, and, if relevant, the provision used in § 668.59 for not recalculating the applicant's EFC.
(3) An institution need not require an applicant to document a spouse's information or provide a spouse's signature if—
(i) The spouse is deceased;
(ii) The spouse is mentally or physically incapacitated;
(iii) The spouse is residing in a country other than the United States and cannot be contacted by normal means of communication; or
(iv) The spouse cannot be located because his or her address is unknown and cannot be obtained by the applicant.
(a)(1) Unless the provisions of paragraph (a)(2) or (a)(3) of this section apply, an applicant is required to update—
(i) The number of family members in the applicant's household and the number of those household members attending postsecondary educational institutions, in accordance with provisions of paragraph (b) of this section; and
(ii) His or her dependency status in accordance with the provisions of paragraph (d) of this section.
(2) An institution need not require an applicant to verify the information contained in his or her application for assistance in an award year if—
(i) The applicant previously submitted an application for assistance for that award year;
(ii) The applicant updated and verified the information contained in that application; and
(iii) No change in the information to be updated has taken place since the last update.
(3) If, as a result of a change in the applicant's marital status, the number of family members in the applicant's household, the number of those household members attending postsecondary education institutions, or the applicant's dependency status changes, the applicant shall not update those factors or that status.
(b) If the number of family members in the applicant's household or the number of those household members attending postsecondary educational institutions changes for a reason other than a change in the applicant's marital status, an applicant who is selected for verification shall update the information contained in his or her application regarding those factors so that the information is correct as of the day the applicant verifies the information.
(c) If an applicant has received Federal Pell Grant, campus-based, Federal Stafford Loan, or Federal Direct Stafford/Ford Loan program assistance for an award year, and the applicant subsequently submits another application for assistance under any of those programs for that award year, and the applicant is required to update household size and number attending postsecondary educational institutions on the subsequent application, the institution—
(1) Is required to take that newly updated information into account when awarding for that award year further Federal Pell Grant or campus-based,
(2) Is not required to adjust the Federal Pell Grant or campus-based, assistance previously awarded to the applicant for that award year, or any previously certified Federal Stafford Loan application or previously originated Direct Subsidized Loan for that award year, to reflect the newly updated information unless the applicant would otherwise receive an overaward.
(d)(1) Except as provided in paragraphs (a)(3) and (d)(2) of this section, if an applicant's dependency status changes after the applicant applies to have his or her EFC calculated for an award year, the applicant must file a new application for that award year reflecting the applicant's new dependency status regardless of whether ther applicant is selected for verification.
(2) If the institution has previously certified a Federal Stafford Loan application for an applicant, the applicant shall not update his or her dependency status on the Federal Stafford Loan application. If the institution has previously originated a Direct Subsidized Loan for a borrower, the school shall not update the borrower's dependence status on the loan origination record.
(a) Except as provided in paragraphs (b), (c), (d), and (e) of this section, an institution shall require an applicant selected for verification under § 668.54(a)(2) or (3) to submit acceptable documentation described in § 668.57 that will verify or update the following information used to determine the applicant's EFC:
(1) Adjusted gross income (AGI) for the base year if base year data was used in determining eligibility, or income earned from work, for a non-tax filer.
(2) U.S. income tax paid for the base year if base year data was used in determining eligibility.
(3)(i) For an applicant who is a dependent student, the aggregate number of family members in the household or households of the applicant's parents if—
(A) The applicant's parent is single, divorced, separated or widowed and the aggregate number of family members is greater than two; or
(B) The applicant's parents are married to each other and not separated and the aggregate number of family members is greater than three.
(ii) For an applicant who is an independent student, the number of family members in the household of the applicant if—
(A) The applicant is single, divorced, separated, or widowed and the number of family members is greater than one; or
(B) The applicant is married and not separated and the number of family members is greater than two.
(4) The number of family members in the household who are enrolled as at least half-time students in postsecondary educational institutions if that number is greater than one.
(5) The following untaxed income and benefits for the base year if base year data was used in determining eligibility—
(i) Social Security benefits if the institution has reason to believe that those benefits were received and were not reported or were incorrectly reported;
(ii) Child support if the institution has reason to believe that child support was received;
(iii) U.S. income tax deduction for a payment made to an individual retirement account (IRA) or Keogh account;
(iv) Interest on tax-free bond;
(v) Foreign income excluded from U.S. income taxation if the institution has reason to believe that foreign income was received;
(vi) The earned income credit taken on the applicant's tax return; and
(vii) All other untaxed income subject to U.S. income tax reporting requirements in the base year which is included on the tax return form, excluding information contained on schedules appended to such forms.
(b) If an applicant selected for verification submits an SAR or output
(1) The number of family members in the household; or
(2) The number of family members in the household, who are enrolled as at least half-time students in postsecondary educational institutions.
(c) If the number of family members in the household or the amount of child support reported by an applicant selected for verification is the same as that verified by the institution in the previous award year, the institution need not require the applicant to verify that information.
(d) If the family members who are enrolled as at least half-time students in postsecondary educational institutions are enrolled at the same institution as the applicant, and the institution verifies their enrollment status from its own records, the institution need not require the applicant to verify that information.
(e) If the applicant or the applicant's spouse or, in the case of a dependent student, the applicant's parents receive untaxed income or benefits from a Federal, State, or local government agency determining their eligibility for that income or those benefits by means of a financial needs test, the institution need not require the untaxed income and benefits to be verified.
(a)
(i) A copy of the income tax return of the applicant, his or her spouse, and his or her parents. The copy of the return must be signed by the filer of the return or by one of the filers of a joint return;
(ii) For a dependent student, a copy of each Internal Revenue Service (IRS) Form W-2 received by the parent whose income is being taken into account if—
(A) The parents filed a joint return; and
(B) The parents are divorced or separated or one of the parents has died; and
(iii) For an independent student, a copy of each IRS Form W-2 he or she received if the independent student—
(A) Filed a joint return; and
(B) Is a widow or widower, or is divorced or separated.
(2) If an individual who filed a U.S. tax return and who is required by paragraph (a)(1) of this section to provide a copy of his or her tax return does not have a copy of that return, the institution may require that individual to submit, in lieu of a copy of the tax return, a copy of an IRS form which lists tax account information.
(3) An institution shall accept, in lieu of an income tax return or an IRS listing of tax account information of an individual whose income was used in calculating the EFC of an applicant, the documentation set forth in paragraph (a)(4) of this section if the individual for the base year—
(i) Has not filed and is not required to file an income tax return;
(ii) Is required to file a U.S. tax return and has been granted a filing extension by the IRS; or
(iii) Has requested a copy of the tax return or a Listing of Tax Account Information, and the IRS or a government of a U.S. territory or commonwealth or a foreign central government cannot locate the return or provide a Listing of Tax Account Information.
(4) An institution shall accept—
(i) For an individual described in paragraph (a)(3)(i) of this section, a statement signed by that individual certifying that he or she has not filed nor is required to file an income tax return for the base year and certifying for that year that individual's—
(A) Sources of income earned from work as stated on the application; and
(B) Amounts of income from each source;
(ii) For an individual described in paragraph (a)(3)(ii) of this section—
(A) A copy of the IRS Form 4868, “Application for Automatic Extension of Time to File U.S. Individual Income Tax Return,” that the individual filed with the IRS for the base year, or a copy of the IRS's approval of an extension beyond the automatic four-month extension if the individual requested an additional extension of the filing time; and
(B) A copy of each IRS Form W-2 that the individual received for the base year, or for a self-employed individual, a statement signed by the individual certifying the amount of adjusted gross income for the base year; and
(iii) For an individual described in paragraph (a)(3)(iii) of this section—
(A) A copy of each IRS Form W-2 that the individual received for the base year; or
(B) For an individual who is self-employed or has filed an income tax return with a government of a U. S. territory or commonwealth, or a foreign central government, a statement signed by the individual certifying the amount of adjusted gross income for the base year.
(5) An institution shall require an individual described in paragraph (a)(3)(ii) of this section to provide to it a copy of his or her completed income tax return when filed. When an institution receives the copy of the return, it may re-verify the adjusted gross income and taxes paid by the applicant and his or her spouse or parents.
(6) If an individual who is required to submit an IRS Form W-2 under this paragraph is unable to obtain one in a timely manner, the institution may permit that individual to set forth, in a statement signed by the individual, the amount of income earned from work, the source of that income, and the reason that the IRS Form W-2 is not available in a timely manner.
(7) For the purpose of this section, an institution may accept in lieu of a copy of an income tax return signed by the filer of the return or one of the filers of a joint return, a copy of the filer's return that has been signed by the preparer of the return or stamped with the name and address of the preparer of the return.
(b)
(c)
(i) The name of each family member who is or will be attending a postsecondary educational institution as at least a half-time student in the award year;
(ii) The age of each student; and
(iii) The name of the institution attended by each student.
(2) If the institution has reason to believe that the information included on the application regarding the number of family household members enrolled in postsecondary institutions is inaccurate, the institution shall require—
(i) The statement required in paragraph (c)(1) of this section from the individuals described in paragraph (c)(1) of this section; and
(ii) A statement from each institution named by the applicant in response to the requirement of paragraph (c)(1)(iii) of this section that the household member in question is or will be attending the institution on at least a half-time basis, unless the institution
(d)
(1) Untaxed income and benefits described in § 668.56(a)(5)(iii), (iv), (v), (vi), and (vii) by submitting to it—
(i) A copy of the U.S. income tax return signed by the filer or one of the filers if a joint return, if collected under paragraph (a) of this section, or the IRS listing of tax account information if collected by the institution to verify adjusted gross income; or
(ii) If no tax return was filed or is required to be filed, a statement signed by the relevant individuals certifying that no tax return was filed or is required to be filed and providing the sources and amount of untaxed income and benefits specified in § 668.56(a)(5) (iii), (iv), (v), and (vi);
(2) Social Security benefits if the institution has reason to believe that those benefits were received and were not reported, or that the applicant has incorrectly reported Social Security benefits received by the applicant, the applicant's parents, or any other children of the applicant's parents who are members of the applicant's household, in the case of a dependent student, or by the applicant, the applicant's spouse, or the applicant's children in the case of an independent student. The applicant shall verify Social Security benefits by submitting a document from the Social Security Administration showing the amount of benefits received in the appropriate calendar year for the appropriate individuals listed above or, at the institution's option, a statement signed by both the applicant and the applicant's parent, in the case of a dependent student, or by the applicant, in the case of an independent student, certifying that the amount listed on the applicant's aid application is correct; and
(3) Child support received by submitting to it—
(i) A statement signed by the applicant and one of the applicant's parents in the case of a dependent student, or by the applicant in the case of an independent student, certifying the amount of child support received; and
(ii) If the institution has reason to believe that the information provided is inaccurate, the applicant must verify the amount of child support received by providing a document such as—
(A) a copy of the separation agreement or divorce decree showing the amount of child support to be provided;
(B) A statement from the parent providing the child support showing the amount provided; or
(C) Copies of the child support checks or money order receipts.
(a)(1) If an institution has reason to believe that the information included on the application is inaccurate, until the applicant verifies or corrects the information included on his or her application, the institution may not—
(i) Disburse any Federal Pell Grant or campus-based program funds to the applicant;
(ii) Employ the applicant in its Federal Work-Study Program;
(iii) Certify the applicant's Federal Stafford Loan application or process Federal Stafford Loan proceeds for any previously certified Federal Stafford Loan application; or
(2) If an institution does not have reason to believe that the information included on an application is inaccurate prior to verification, the institution—
(i) May withhold payment of Federal Pell Grant, campus-based funds; or
(ii)(A) May make one disbursement of any combination of Federal Pell Grant, Federal Perkins Loan, or FSEOG funds for the applicant's first payment period; and
(B) May employ or allow an employer to employ an eligible student under the
(iii)(A) May withhold certification of the applicant's Federal Stafford Loan application or origination of the applicant's Direct Subsidized Loan; or
(B) May certify the Federal Stafford Loan application or originate the Direct Subsidized Loan provided that the institution does not deliver Federal Stafford Loan proceeds or disburse Direct Subsidized Loan proceeds.
(b) If an institution chooses to make disbursement under paragraph (a)(2)(ii) (A) or (B) of this section, it is liable for any overpayment discovered as a result of the verification process to the extent that the overpayment is not recovered from the student.
(c) An institution may not withhold any Federal Stafford Loan or Direct Loan proceeds from a student under paragraph (a)(2) of this section for more than 45 days. If the applicant does not complete the verification process within the 45 day period, the institution shall return the proceeds to the lender.
(d)(1) If the institution receives Federal Stafford Loan or Direct Loan proceeds in an amount which exceeds the student's need for the loan based upon the verified information and the excess funds can be eliminated by reducing subsequent disbursements for the applicable loan period, the institution shall process the proceeds and advise the lender to reduce the subsequent disbursements.
(2) If the institution receives Federal Stafford Loan or Direct Loan proceeds in an amount which exceed the student's need for the loan based upon the verified information and the excess funds cannot be eliminated in subsequent disbursements for the applicable loan period, the institution shall return the excess proceeds to the lender.
(a) For the Federal Pell Grant Program—
(1) Except as provided in paragraph (a)(2) of this section, if the information on an application changes as a result of the verification process, the institution shall require the applicant to resubmit his or her application information to the Secretary for corrections if—
(i) The institution recalculates the applicant's EFC, determines that the applicant's EFC changes, and determines that the change in the EFC changes the applicant's Federal Pell Grant award; or
(ii) The institution does not recalculate the applicant's EFC.
(2) An institution need not require an applicant to resubmit his or her application information to the Secretary, recalculate an applicant's EFC, or adjust an applicant's Federal Pell Grant award if, as a result of the verification process, the institution finds—
(i) No errors in nondollar items used to calculate the applicant's EFC;
(ii) No dollar amount in excess of $400 as calculated by the net difference between the corrected sum of Adjusted Gross Income (AGI) plus untaxed income minus U.S. taxes paid and the uncorrected sum of Adjusted Gross Income (AGI) plus untaxed income minus U.S. taxes paid. If no Federal Income Tax Return was filed, income earned from work may be used in lieu of Adjusted Gross Income (AGI).
(b) For the Federal Pell Grant Program—
(1) If an institution does not recalculate an applicant's EFC under the provisions of paragraph (a)(2) of this section, the institution shall calculate and disburse the applicant's Federal Pell Grant award on the basis of the applicant's original EFC.
(2)(i) Except as provided under paragraph (b)(2)(ii) of this section, if an institution recalculates an applicant's EFC because of a change in application information resulting from the verification process, the institution shall—
(A) Require the applicant to resubmit his or her application to the Secretary;
(B) Recalculate the applicant's Federal Pell Grant award on the basis of
(C) Disburse any additional funds under that award only if the applicant provides the institution with the corrected SAR or ISIR and only to the extent that additional funds are payable based on the recalculation.
(ii) If an institution recalculates an applicant's EFC because of a change in application information resulting from the verification process and determines that the change in the EFC increases the applicant's award, the institution—
(A) May disburse the applicant's Federal Pell Grant award on the basis of the original EFC without requiring the applicant to resubmit his or her application information to the Secretary; and
(B) Except as provided in § 668.60(b), shall disburse any additional funds under the increased award reflecting the new EFC if the institution receives the corrected SAR or ISIR.
(c) For the campus-based, and Federal Stafford Loan or Federal Direct Stafford/Ford Direct Loan programs—
(1) Except as provided in paragraph (c)(2) of this section, if the information on an application changes as a result of the verification process, the institution shall—
(i) Recalculate the applicant's EFC; and
(ii) Adjust the applicant's financial aid package for the campus-based, and Federal Stafford Loan or Federal Direct Stafford/Ford Direct Loan programs to reflect the new EFC if the new EFC results in an overaward of campus-based funds or decreases the applicant's recommended loan amount.
(2) An institution need not recalculate an applicant's EFC or adjust his or her aid package if, as a result of the verification process, the institution finds—
(i) No errors in nondollar items used to calculate the applicant's EFC;
(ii) No dollar amount in excess of $400 as calculated by the net difference between the corrected sum of Adjusted Gross Income (AGI) plus untaxed income minus U.S. taxes paid and the uncorrected sum of Adjusted Gross Income (AGI) plus untaxed income minus U.S. taxes paid. If no Federal Income Tax Return was filed, income earned from work may be used in lieu of Adjusted Gross Income (AGI).
(d)(1) If the institution selects an applicant for verification for an award year who previously received a Direct Subsidized Loan for that award year, and as a result of verification the loan amount is reduced, the institution shall comply with the procedures specified in § 668.61(b)(2).
(2) If the institution selects an applicant for verification for an award year who previously received a loan under the Federal Stafford Loan Program for that award year, and as a result of verification the loan amount is reduced, the institution shall comply with the procedures for notifying the borrower and lender specified in § 668.61(b) and § 682.604(h).
(e) If the applicant has received funds based on information which may be incorrect and the institution has made a reasonable effort to resolve the alleged discrepancy, but cannot do so, the institution shall forward the applicant's name, social security number, and other relevant information to the Secretary.
(a) An institution shall require an applicant selected for verification to submit to it, within the period of time it or the Secretary specifies, the documents set forth in § 668.57 that are requested by the institution or the Secretary.
(b) For purposes of the campus-based, Federal Stafford Loan, Federal Direct Stafford/Ford Loan programs—
(1) If an applicant fails to provide the requested documentation within a reasonable time period established by the institution or by the Secretary—
(i) The institution may not—
(A) Disburse any additional Federal Perkins Loan, FSEOG or funds to the applicant;
(B) Continue to employ or allow an employer to employ the applicant under FWS;
(C) Certify the applicant's Federal Stafford Loan application or originate the applicant's Direct Subsidized Loan; or
(D) Process Federal Stafford Loan or Direct Subsidized Loan Direct Loan proceeds for the applicant;
(ii) The institution shall return to the lender, or to the Secretary, in the case of a Direct Subsidized Loan, any Federal Stafford Loan or Direct Subsidized Loan proceeds that otherwise would be payable to the applicant; and
(iii) The applicant shall repay to the institution any Federal Perkins Loan, FSEOG, or payments received for that award year;
(2) If the applicant provides the requested documentation after the time period established by the institution, the institution may, at its option, award aid to the applicant notwithstanding paragraph (b)(1)(i) of this section; and
(3) An institution may not withhold any Federal Stafford Loan proceeds from an applicant under paragraph (b)(1)(i)(D) of this section for more than 45 days. If the applicant does not complete verification within the 45-day period, the institution shall return the Federal Stafford Loan proceeds to the lender.
(c) For purposes of the Federal Pell Grant Program—
(1) An applicant may submit a verified SAR to the institution or the institution may receive a verified ISIR after the applicable deadline specified in 34 CFR 690.61 but within an established additional time period set by the Secretary through publication of a notice in the
(2) If the applicant does not provide to the institution the requested documentation and, if necessary, a verified SAR or the institution does not receive a verified ISIR, within the additional time period referenced in paragraph (c)(1) of this section, the applicant—
(i) Forfeits the Federal Pell Grant for the award year; and
(ii) Shall return any Federal Pell Grant payments previously received for that award year to the Secretary.
(d) The Secretary may determine not to process any subsequent application for Federal Pell Grant, and an institution, if directed by the Secretary, may not process any subsequent application for campus-based, Federal Direct Stafford/Ford Loan, or Federal Stafford Loan program assistance of an applicant who has been requested to provide documentation until the applicant provides the documentation or the Secretary decides that there is no longer a need for the documentation.
(e) If an applicant selected for verification for an award year dies before the deadline for completing the verification process without completing that process, and the deadline is in the subsequent award year, the institution may not—
(1) Make any further disbursements on behalf of that applicant;
(2) Certify that applicant's Federal Stafford Loan application, originate that applicant's Direct Subsidized Loan, or process that applicant's Federal Stafford Loan or Direct Subsidized Loan proceeds; or
(3) Consider any funds it disbursed to that applicant under § 668.58(a)(2) as an overpayment.
(a) If an institution discovers, as a result of the verification process, that an applicant received under § 668.58(a)(2)(ii)(A) more financial aid than the applicant was eligible to receive, the institution shall eliminate the overpayment by—
(1) Adjusting subsequent financial aid payments in the award year in which the overpayment occurred; or
(2) Reimbursing the appropriate program account by—
(i) Requiring the applicant to return the overpayment to the institution if the institution cannot correct the overpayment under paragraph (a)(1) of this section; or
(ii) Making restitution from its own funds, by the earlier of the following dates, if the applicant does not return the overpayment:
(A) Sixty days after the applicant's last day of attendance.
(B) The last day of the award year in which the institution disbursed Federal Pell Grant, Federal Perkins Loan, or FSEOG funds to the applicant.
(b)(1) If the institution determines as a result of the verification process that an applicant received Stafford Loan or proceeds for an award year in excess of the student's financial need for the loan, the institution shall withhold and promptly return to the lender or escrow agent any disbursement not yet delivered to the student that exceeds the amount of assistance for which the student is eligible, taking into account other financial aid received by the student. However, instead of returning the entire undelivered disbursement, the school may choose to return promptly to the lender only the portion of the disbursement for which the student is ineligible. In either case, the institution shall provide the lender with a written statement describing the reason for the returned loan funds.
(2) If the institution determines as a result of the verification process that a student received Direct Subsidized Loan proceeds for an award year in excess of the student's need for the loan, the institution shall reduce or cancel one or more subsequent disbursements to eliminate the amount in excess of the student's need.
(a) This subpart establishes the standards and rules by which the Secretary may initiate a proceeding under subpart G against an otherwise eligible institution for any substantial misrepresentation made by that institution regarding the nature of its educational program, its financial charges or the employability of its graduates.
(b) The following definitions apply to this subpart:
Misrepresentation by an institution of the nature of its educational program includes, but is not limited to, false, erroneous or misleading statements concerning—
(a) The particular type(s), specific source(s), nature and extent of its accreditation;
(b) Whether a student may transfer course credits earned at the institution to any other institution;
(c) Whether successful completion of a course of instruction qualifies a student for—
(1) Acceptance into a labor union or similar organization; or
(2) Receipt of a local, State or Federal license or a non-governmental certification required as a precondition for employment or to perform certain functions;
(d) Whether its courses are recommended by—
(1) Vocational counselors, high schools or employment agencies; or
(2) Governmental officials for governmental employment;
(e) Its size, location, facilities or equipment;
(f) The availability, frequency and appropriateness of its courses and programs to the employment objectives that it states its programs are designed to meet;
(g) The nature, age and availability of its training devices or equipment and their appropriateness to the employment objectives that it states its programs and courses are designed to meet;
(h) The number, availability and qualifications, including the training and experience, of its faculty and other personnel;
(i) The availability of part-time employment or other forms of financial assistance;
(j) The nature and availability of any tutorial or specialized instruction, guidance and counseling, or other supplementary assistance it will provide its students before, during or after the completion of a course;
(k) The nature of extent of any prerequisites established for enrollment in any course; or
(l) Any matters required to be disclosed to prospective students under §§ 668.44 and 668.47 of this part.
Misrepresentation by an institution of the nature of its financial charges includes, but is not limited to, false, erroneous or misleading statements concerning—
(a) Offers of scholarships to pay all or part of a course charge, unless a scholarship is actually used to reduce tuition charges made known to the student in advance. The charges made known to the student in advance are the charges applied to all students not receiving a scholarship; or
(b) Whether a particular charge is the customary charge at the institution for a course.
Misrepresentation by an institution regarding the employability of its graduates includes, but is not limited to, false, erroneous or misleading statements—
(a) That the institution is connected with any organization or is an employment agency or other agency providing authorized training leading directly to employment.
(b) That the institution maintains a placement service for graduates or will otherwise secure or assist its graduates to obtain employment, unless it provides the student with a clear and accurate description of the extent and nature of this service or assistance; or
(c) Concerning government job market statistics in relation to the potential placement of its graduates.
(a) On receipt of a written allegation or compliant from a student enrolled at the institution, a prospective student, the family of a student or prospective student, or a governmental official, the designated department official as defined in § 688.81 reviews the allegation or compliant to determine its factual base and seriousness.
(b) If the misrepresentation is minor and can be readily corrected, the designated department official informs the institution and endeavors to obtain an informal, voluntary correction.
(c) If the designated department official finds that the complaint or allegation is a substantial misrepresentation as to the nature of the educational programs, the financial charges of the institution or the employability of its graduates, the official—
(1) Initiates action to fine or to limit, suspend or terminate the institution's eligibility to participate in the Title IV, HEA programs according to the procedures set forth in subpart G, or
(2) Take other appropriate action.
(a) This subpart establishes regulations for the following actions with respect to a participating institution or third-party servicer:
(1) An emergency action.
(2) The imposition of a fine.
(3) The limitation, suspension, or termination of the participation of the institution in a title IV, HEA program.
(4) The limitation, suspension, or termination of the eligibility of the servicer to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program.
(b) This subpart applies to an institution or a third-party servicer that violates any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA.
(c) This subpart does not apply to a determination that—
(1) An institution or any of its locations or educational programs fails to qualify for initial designation as an eligible institution, location, or educational program because the institution, location, or educational program fails to satisfy the statutory and regulatory provisions that define an eligible institution or educational program with respect to the Title IV, HEA program for which a designation of eligibility is sought;
(2) An institution fails to qualify for initial certification or provisional certification to participate in any Title IV, HEA program because the institution does not meet the factors of financial responsibility and standards of administrative capability contained in subpart B of this part;
(3) A participating institution's or a provisionally certified participating institution's period of participation, as specified under § 668.13, has expired; or
(4) A participating institution's provisional certification is revoked under the procedures in § 668.13.
(d) This subpart does not apply to a determination by the Secretary of the system to be used to disburse Title IV, HEA program funds to a participating institution (i.e., advance payments and payments by way of reimbursements).
(a) A participating institution or a third-party servicer that contracts with that institution acts in the nature of a fiduciary in the administration of the Title IV, HEA programs. To participate in any Title IV, HEA program, the institution or servicer must at all times act with the competency and integrity necessary to qualify as a fiduciary.
(b) In the capacity of a fiduciary—
(1) A participating institution is subject to the highest standard of care and diligence in administering the programs and in accounting to the Secretary for the funds received under those programs; and
(2) A third-party servicer is subject to the highest standard of care and diligence in administering any aspect of the programs on behalf of the institutions with which the servicer contracts and in accounting to the Secretary and those institutions for any funds administered by the servicer under those programs.
(c) The failure of a participating institution or any of the institution's third-party servicers to administer a Title IV, HEA program, or to account for the funds that the institution or servicer receives under that program, in accordance with the highest standard of care and diligence required of a fiduciary, constitutes grounds for—
(1) An emergency action against the institution, a fine on the institution,
(2) An emergency action against the servicer, a fine on the servicer, or the limitation, suspension, or termination of the servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in that program.
(d)(1) A participating institution or a third-party servicer with which the institution contracts violates its fiduciary duty if—
(i)(A) The servicer has been convicted of, or has pled
(B) A person who exercises substantial control over the servicer, as determined according to § 668.15, has been convicted of, or has pled
(C) The servicer employs a person in a capacity that involves the administration of Title IV, HEA programs or the receipt of Title IV, HEA program funds who has been convicted of, or has pled
(D) The servicer uses or contracts in a capacity that involves any aspect of the administration of the Title IV, HEA programs with any other person, agency, or organization that has been or whose officers or employees have been—
(
(
(ii) Upon learning of a conviction, plea, or administrative or judicial determination described in paragraph (d)(1)(i) of this section, the institution or servicer, as applicable, does not promptly remove the person, agency, or organization from any involvement in the administration of the institution's participation in Title IV, HEA programs, or, as applicable, the removal or elimination of any substantial control, as determined according to § 668.15, over the servicer.
(2) A violation for a reason contained in paragraph (d)(1) of this section is grounds for terminating—
(i) The servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program; and
(ii) The participation in any Title IV, HEA program of any institution under whose contract the servicer committed the violation, if that institution had been aware of the violation and had failed to take the appropriate action described in paragraph (d)(1)(ii) of this section.
(e)(1) A participating institution or third-party servicer, as applicable, violates its fiduciary duty if—
(i)(A) The institution or servicer, as applicable, is debarred or suspended under Executive Order (E.O.) 12549 (3 CFR, 1986 Comp., p. 189) or the Federal Acquisition Regulations (FAR), 48 CFR part 9, subpart 9.4; or
(B) Cause exists under 34 CFR 85.305 or 85.405 for debarring or suspending the institution, servicer, or any principal or affiliate of the institution or servicer under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4; and
(ii) Upon learning of the debarment, suspension, or cause for debarment or suspension, the institution or servicer, as applicable, does not promptly—
(A) Discontinue the affiliation; or
(B) Remove the principal from responsibility for any aspect of the administration of an institution's or
(2) A violation for a reason contained in paragraph (e)(1) of this section is grounds for terminating—
(i) The institution's participation in any Title IV, HEA program; and
(ii) The servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in any Title IV, HEA program. The violation is also grounds for terminating, under this subpart, the participation in any Title IV, HEA program of any institution under whose contract the servicer committed the violation, if that institution knew or should have known of the violation.
(f)(1) The debarment of a participating institution or third-party servicer, as applicable, under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4, or another Federal agency from participation in Federal programs, under procedures described in 34 CFR 85.201(c) terminates, for the duration of the debarment—
(i) The institution's participation in any Title IV, HEA program; and
(ii) The servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in any Title IV, HEA program.
(2)(i) The suspension of a participating institution or third-party servicer, as applicable, under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4, or another Federal agency from participation in Federal programs, under procedures described in 34 CFR 85.201(c), suspends—
(A) The institution's participation in any Title IV, HEA program; and
(B) The servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in any Title IV, HEA program.
(ii) A suspension described in paragraph (f)(2) of this section lasts for a period of 60 days, beginning on the effective date specified in the notice by the Secretary under 34 CFR 85.201(b), unless—
(A) The institution or servicer, as applicable, and the Secretary, agree to an extension of the suspension; or
(B) The Secretary begins a limitation or termination proceeding against the institution or servicer, as applicable, under this subpart before the 60th day of the suspension.
(3) A debarment or suspension not described in (f)(1) or (f)(2) of this section of a participating institution or third-party servicer by another Federal agency constitutes prima facie evidence in a proceeding under this subpart that cause for suspension or debarment and termination, as applicable, exists.
(a) Under an emergency action, the Secretary may—
(1) Withhold Title IV, HEA program funds from a participating institution or its students, or from a third-party servicer, as applicable;
(2)(i) Withdraw the authority of the institution or servicer, as applicable, to commit, disburse, deliver, or cause the commitment, disbursement, or delivery of Title IV, HEA program funds; or
(ii) Withdraw the authority of the institution or servicer, as applicable, to commit, disburse, deliver, or cause the commitment, disbursement, or delivery of Title IV, HEA program funds except in accordance with a particular procedure; and
(3)(i) Withdraw the authority of the servicer to administer any aspect of any institution's participation in any Title IV, HEA program; or
(ii) Withdraw the authority of the servicer to administer any aspect of any institution's participation in any Title IV, HEA program except in accordance with a particular procedure.
(b)(1) An initiating official begins an emergency action against an institution or third-party servicer by sending the institution or servicer a notice by registered mail, return receipt requested. In an emergency action against a third-party servicer, the official also sends the notice to each institution that contracts with the servicer.
(2) The emergency action takes effect on the date the initiating official mails the notice to the institution or servicer, as applicable.
(3) The notice states the grounds on which the emergency action is based, the consequences of the emergency action, and that the institution or servicer, as applicable, may request an opportunity to show cause why the emergency action is unwarranted.
(c)(1) An initiating official takes emergency action against an institution or third-party servicer only if that official—
(i) Receives information, determined by the official to be reliable, that the institution or servicer, as applicable, is violating any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA;
(ii) Determines that immediate action is necessary to prevent misuse of Title IV, HEA program funds; and
(iii) Determines that the likelihood of loss from that misuse outweighs the importance of awaiting completion of any proceeding that may be initiated to limit, suspend, or terminate, as applicable—
(A) The participation of the institution in one or more Title IV, HEA programs; or
(B) The eligibility of the servicer to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program.
(2) Examples of violations of a Title IV, HEA program requirement that cause misuse and the likely loss of Title IV, HEA program funds include—
(i) Causing the commitment, disbursement, or delivery by any party of Title IV, HEA program funds in an amount that exceeds—
(A) The amount for which students are eligible; or
(B) The amount of principal, interest, or special allowance payments that would have been payable to the holder of a Federal Stafford or Federal PLUS loan if a refund allocable to that loan had been made in the amount and at the time required;
(ii) Using, offering to make available, or causing the use or availability of Title IV, HEA program funds for educational services if—
(A) The institution, servicer, or agents of the institution or servicer have made a substantial misrepresentation as described in §§ 668.72, 668.73, or 668.74 related to those services;
(B) The institution lacks the administrative or financial ability to provide those services in full; or
(C) The institution, or servicer, as applicable, lacks the administrative or financial ability to make all required payments under § 668.22; and
(iii) Engaging in fraud involving the administration of a Title IV, HEA program. Examples of fraud include—
(A) Falsification of any document received from a student or pertaining to a student's eligibility for assistance under a Title IV, HEA program;
(B) Falsification, including false certifications, of any document submitted by the institution or servicer to the Secretary;
(C) Falsification, including false certifications, of any document used for or pertaining to—
(
(
(D) Falsification, including false certifications, of any document submitted to a guaranty agency under the Federal Stafford Loan or Federal PLUS programs or an independent auditor;
(E) Falsification of any document submitted to a third-party servicer by an institution or to an institution by a third-party servicer pertaining to the institution's participation in a Title IV, HEA program; and
(F) Falsification, including false certifications, of any document pertaining to the performance of any loan collection activity, including activity that is not required by the HEA or applicable program regulations.
(3) If the Secretary begins an emergency action against a third-party servicer, the Secretary may also begin an emergency action against any institution under whose contract a third-party servicer commits the violation.
(d)(1) Except as provided in paragraph (d)(2) of this section, after an emergency action becomes effective, an institution or third-party servicer, as applicable, may not—
(i) Make or increase awards or make other commitments of aid to a student under the applicable Title IV, HEA program;
(ii) Disburse either program funds, institutional funds, or other funds as assistance to a student under that Title IV, HEA program;
(iii) In the case of an emergency action pertaining to participation in the Federal Stafford Loan or Federal PLUS programs—
(A) Certify an application for a loan under that program;
(B) Deliver loan proceeds to a student under that program; or
(C) Retain the proceeds of a loan made under that program that are received after the emergency action takes effect; or
(iv) In the case of an emergency action against a third-party servicer, administer any aspect of any institution's participation in any Title IV, HEA program.
(2) If the initiating official withdraws, by an emergency action, the authority of the institution or servicer to commit, disburse, deliver, or cause the commitment, disbursement, or delivery of Title IV, HEA program funds, or the authority of the servicer to administer any aspect of any institution's participation in any Title IV, HEA program, except in accordance with a particular procedure specified in the notice of emergency action, the institution or servicer, as applicable, may not take any action described in paragraph (d)(1) of this section except in accordance with the procedure specified in the notice.
(e)(1) Upon request by the institution or servicer, as applicable, the Secretary provides the institution or servicer, as soon as practicable, with an opportunity to show cause that the emergency action is unwarranted or should be modified.
(2) An opportunity to show cause consists of an opportunity to present evidence and argument to a show-cause official. The initiating official does not act as the show-cause official for any emergency action that the initiating official has begun. The show-cause official is authorized to grant relief from the emergency action. The institution or servicer may make its presentation in writing or, upon its request, at an informal meeting with the show-cause official.
(3) The show-cause official may limit the time and manner in which argument and evidence may be presented in order to avoid unnecessary delay or the presentation of immaterial, irrelevant, or repetitious matter.
(4) The institution or servicer, as applicable, has the burden of persuading the show-cause official that the emergency action imposed by the notice is unwarranted or should be modified because—
(i) The grounds stated in the notice did not, or no longer, exist;
(ii) The grounds stated in the notice will not cause loss or misuse of Title IV, HEA program funds; or
(iii) The institution or servicer, as applicable, will use procedures that will reliably eliminate the risk of loss from the misuse described in the notice.
(5) The show-cause official continues, modifies, or revokes the emergency action promptly after consideration of any argument and evidence presented by the institution or servicer, as applicable, and the initiating official.
(6) The show-cause official notifies the institution or servicer, as applicable, of that official's determination promptly after the completion of the show-cause meeting or, if no meeting is requested, after the official receives all the material submitted by the institution in opposition to the emergency action. In the case of a notice to a third-party servicer, the official also notifies each institution that contracts with the servicer of that determination. The show-cause official may explain that
(f)(1) An emergency action does not extend more than 30 days after initiated unless the Secretary initiates a limitation, suspension, or termination proceeding under this part or under 34 CFR part 600 against the institution or servicer, as applicable, within that 30-day period, in which case the emergency action continues until a final decision is issued in that proceeding, as provided in § 668.90(c), as applicable.
(2) Until a final decision is issued by the Secretary in a proceeding described in paragraph (f)(1) of this section, any action affecting the emergency action is at the sole discretion of the initiating official, or, if a show- cause proceeding is conducted, the show-cause official.
(3) If an emergency action extends beyond 180 days by virtue of paragraph (f)(1) of this section, the institution or servicer, as applicable, may then submit written material to the show-cause official to demonstrate that because of facts occurring after the later of the notice by the initiating official or the show-cause meeting, continuation of the emergency action is unwarranted and the emergency action should be modified or ended. The show-cause official considers any written material submitted and issues a determination that continues, modifies, or revokes the emergency action.
(g) The expiration of an emergency action, or its modification or revocation by the show-cause official, does not bar subsequent emergency action on a ground other than one specifically identified in the notice imposing the prior emergency action. Separate grounds may include violation of an agreement or limitation imposed or resulting from the prior emergency action.
(a)
(i) Violates any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA; or
(ii) Substantially misrepresents the nature of—
(A) In the case of an institution, its educational program, its financial charges, or the employability of its graduates; or
(B) In the case of a third-party servicer, as applicable, the educational program, financial charges, or employability of the graduates of any institution that contracts with the servicer.
(2) If the Secretary begins a fine proceeding against a third-party servicer, the Secretary also may begin a fine, limitation, suspension, or termination proceeding against any institution under whose contract a third-party servicer commits the violation.
(b)
(i) Informs the institution or servicer of the Secretary's intent to fine the institution or servicer, as applicable, and the amount of the fine and identifies the alleged violations that constitute the basis for the action;
(ii) Specifies the proposed effective date of the fine, which is at least 20 days from mailing of the notice of intent;
(iii) Informs the institution or servicer that the fine will not be effective on the date specified in the notice
(iv) In the case of a fine proceeding against a third-party servicer, informs each institution that is affected by the alleged violations of the consequences of the action to the institution.
(2) If the institution or servicer does not request a hearing but submits written material, the designated department official, after considering that material, notifies the institution or, in the case of a third-party servicer, the servicer and each institution affected by the alleged violations that—
(i) The fine will not be imposed; or
(ii) The fine is imposed as of a specified date, and in a specified amount.
(3) If the institution or servicer requests a hearing by the time specified in paragraph (b)(1)(iii) of this section, the designated department official sets the date and the place. The date is at least 15 days after the designated department official receives the request.
(4) A hearing official conducts a hearing in accordance with § 668.88.
(c)
(a)
(i) Violates any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA; or
(ii) Substantially misrepresents the nature of—
(A) In the case of an institution, its educational program, its financial charges, or the employability of its graduates; or
(B) In the case of a third-party servicer, as applicable, the educational program, financial charges, or employability of the graduates of any institution that contracts with the servicer.
(2) If the Secretary begins a suspension proceeding against a third-party servicer, the Secretary also may begin a fine, limitation, suspension, or termination proceeding against any institution under whose contract a third-party servicer commits the violation.
(3) The suspension may not exceed 60 days unless—
(i) The institution or servicer and the Secretary agree to an extension if the institution or servicer, as applicable, has not requested a hearing; or
(ii) The designated department official begins a limitation or termination proceeding under § 668.86.
(b)
(i) Informs the institution or servicer of the intent of the Secretary to suspend the institution's participation or the servicer's eligibility, as applicable, cites the consequences of that action, and identifies the alleged violations that constitute the basis for the action;
(ii) Specifies the proposed effective date of the suspension, which is at least 20 days after the date of mailing of the notice of intent;
(iii) Informs the institution or servicer that the suspension will not be effective on the date specified in the notice, except as provided in
(iv) In the case of a suspension proceeding against a third-party servicer, informs each institution that contracts with the servicer of the consequences of the action to the institution.
(2) If the institution or servicer does not request a hearing, but submits written material, the designated department official, after considering that material, notifies the institution or, in the case of a third-party servicer, the servicer and each institution that contracts with the servicer that—
(i) The proposed suspension is dismissed; or
(ii) The suspension is effective as of a specified date.
(3) If the institution or servicer requests a hearing by the time specified in paragraph (b)(1)(iii) of this section, the designated department official sets the date and place. The date is at least 15 days after the designated department official receives the request. The suspension does not take place until after the requested hearing is held.
(4) A hearing official conducts a hearing in accordance with § 668.88.
(c)
(a)
(i) Violates any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA; or
(ii) Substantially misrepresents the nature of—
(A) In the case of an institution, its educational program, its financial charges, or the employability of its graduates; or
(B) In the case of a third-party servicer, as applicable, the educational program, financial charges, or employability of the graduates of any institution that contracts with the servicer.
(2) If the Secretary begins a limitation or termination proceeding against a third-party servicer, the Secretary also may begin a fine, limitation, suspension, or termination proceeding against any institution under whose contract a third-party servicer commits the violation.
(3) The consequences of the limitation or termination of the institution's participation or the servicer's eligibility are described in §§ 668.93 and 668.94, respectively.
(b)
(i) Informs the institution or servicer of the intent of the Secretary to limit or terminate the institution's participation or servicer's eligibility, as applicable, cites the consequences of that action, and identifies the alleged violations that constitute the basis for the action, and, in the case of a limitation proceeding, states the limits to be imposed;
(ii) Specifies the proposed effective date of the limitation or termination, which is at least 20 days after the date of mailing of the notice of intent;
(iii) Informs the institution or servicer that the limitation or termination will not be effective on the date specified in the notice if the designated department official receives from the institution or servicer, as applicable, by that date a request for a hearing or written material indicating why the limitation or termination should not take place; and
(iv) In the case of a limitation or termination proceeding against a third-party servicer, informs each institution that contracts with the servicer of the consequences of the action to the institution.
(2) If the institution or servicer does not request a hearing but submits written material, the designated department official, after considering that material, notifies the institution or, in the case of a third-party servicer, the servicer and each institution that contracts with the servicer that—
(i) The proposed action is dismissed;
(ii) Limitations are effective as of a specified date; or
(iii) The termination is effective as of a specified date.
(3) If the institution or servicer requests a hearing by the time specified in paragraph (b)(1)(iii) of this section, the designated department official sets the date and place. The date is at least 15 days after the designated department official receives the request. The limitation or termination does not take place until after the requested hearing is held.
(4) A hearing official conducts a hearing in accordance with § 668.88.
(c)
(a) A hearing official may convene a prehearing conference if he or she thinks that the conference would be useful, or if the conference is requested by—
(1) The designated department official who brought a proceeding against an institution or third-party servicer under this subpart; or
(2) The institution or servicer, as applicable.
(b) The purpose of a prehearing conference is to allow the parties to settle or narrow the dispute.
(c) If the hearing official, the designated department official, and the institution, or servicer, as applicable, agree, a prehearing conference may consist of—
(1) A conference telephone call;
(2) An informal meeting; or
(3) The submission and exchange of written material.
(a) A hearing is an orderly presentation of arguments and evidence conducted by a hearing official.
(b) If the hearing official, the designated department official who brought a proceeding against an institution or third-party servicer under this subpart, and the institution or servicer, as applicable, agree, the hearing process may be expedited. Procedures to expedite the hearing process may include, but are not limited to, the following—
(1) A restriction on the number or length of submissions;
(2) The conduct of the hearing by telephone conference call;
(3) A stipulation by the parties to facts and legal authorities not in dispute; or
(4) A review limited to the written record.
(c)(1) The formal rules of evidence and procedures applicable to proceedings in a court of law are not applicable. However, discussions of settlement between the parties or the terms of settlement offers are not admissible.
(2) The designated department official has the burden of persuasion in any fine, suspension, limitation or termination proceeding under this subpart.
(3) Discovery, as provided for under the Federal Rules of Civil Procedure, is not permitted.
(4) The hearing official accepts only evidence that is relevant and material to the proceeding and is not unduly repetitious.
(d) The designated department official makes a transcribed record of the proceeding and makes one copy of the record available to the institution or servicer.
(a) The hearing official regulates the course of a hearing and the conduct of the parties during the hearing. The hearing official takes all necessary steps to conduct a fair and impartial hearing.
(b)(1) The hearing official is not authorized to issue subpoenas.
(2) If requested by the hearing official, the parties to a hearing shall provide available personnel who have knowledge about the matter under review for oral or written examination.
(c) The hearing official takes whatever measures are appropriate to expedite a hearing. These measures may include, but are not limited to, the following—
(1) Scheduling of conferences;
(2) Setting time limits for hearings and submission of written documents; and
(3) Terminating the hearing and issuing a decision against a party if that party does not meet those time limits.
(d) The hearing official is bound by all applicable statutes and regulations. The hearing official may not—
(1) Waive applicable statutes and regulations; or
(2) Rule them invalid.
(a)(1)(i) A hearing official issues a written initial decision in a hearing by certified mail, return receipt requested to—
(A) The designated department official who began a proceeding against an institution or third-party servicer;
(B) The institution or servicer, as applicable; and
(C) In the case of a proceeding against a third-party servicer, each institution that contracts with the servicer.
(ii) The hearing official may also transmit the notice by other, more expeditious means if practical.
(iii) The hearing official issues the decision within the latest of the following dates:
(A) The 30th day after the last submission is filed with the hearing official.
(B) The 60th day after the last submission is filed with the hearing official if the Secretary, upon request of the hearing official, determines that the unusual complexity of the case requires additional time for preparation of the decision.
(C) The 50th day after the last day of the hearing, if the hearing official does not request the parties to make any posthearing submission.
(2) The hearing official's initial decision states whether the imposition of the fine, limitation, suspension, or termination sought by the designated department official is warranted, in whole or in part. If the designated department official brought a termination action against the institution or servicer, the hearing official may, if appropriate, issue an initial decision to fine the institution or servicer, as applicable, or, rather than terminating the institution's participation or servicer's eligibility, as applicable, impose one or more limitations on the institution's participation or servicer's eligibility.
(3) Notwithstanding the provisions of paragraph (a)(2) of this section—
(i) If, in a termination action against an institution, the hearing official finds that the institution has violated the provisions of § 668.14(b)(18), the hearing official also finds that termination of the institution's participation is warranted;
(ii) If, in a termination action against a third-party servicer, the
(iii) If an action brought against an institution or third-party servicer involves its failure to provide surety in the amount specified by the Secretary under § 668.15, the hearing official finds that the amount of the surety established by the Secretary was appropriate, unless the institution can demonstrate that the amount was unreasonable;
(iv) In a termination action taken against an institution or third-party servicer based on the grounds that the institution or servicer failed to comply with the requirements of § 668.23(c)(3), if the hearing official finds that the institution or servicer failed to meet those requirements, the hearing official finds that the termination is warranted;
(v) In a termination action against an institution based on the grounds that the institution is not financially responsible under § 668.15(c)(1), the hearing official finds that the termination is warranted unless the institution demonstrates that all applicable conditions described in § 668.15(d)(4) have been met; and
(vi) In a termination action against an institution or third-party servicer on the grounds that the institution or servicer, as applicable, engaged in fraud involving the administration of any Title IV, HEA program, the hearing official finds that the termination action is warranted if the hearing official finds that the institution or servicer, as applicable, engaged in that fraud. Examples of fraud include—
(A) Falsification of any document received from a student or pertaining to a student's eligibility for assistance under a Title IV, HEA program;
(B) Falsification, including false certifications, of any document submitted by the institution or servicer to the Department of Education;
(C) Falsification, including false certifications, of any document used for or pertaining to—
(
(
(D) Falsification, including false certifications, of any document submitted to a guaranty agency under the Federal Stafford Loan, Federal PLUS, and Federal SLS programs, an independent auditor, an eligible institution, or a third-party servicer;
(E) Falsification of any document submitted to a third-party servicer by an institution or to an institution by a third-party servicer pertaining to the institution's participation in a Title IV, HEA program; and
(F) Falsification, including false certifications, of any document pertaining to the performance of any loan collection activity, including activity that is not required by the HEA or applicable program regulations.
(4) The hearing official bases findings of fact only on evidence considered at the hearing and on matters given judicial notice. If a hearing is conducted solely through written submissions, the parties must agree to findings of fact.
(b)(1) In a suspension proceeding, the Secretary reviews the hearing official's initial decision and issues a final decision within 20 days after the initial decision. The Secretary adopts the initial decision unless it is clearly unsupported by the evidence presented at the hearing.
(2) The Secretary notifies the institution or servicer and, in the case of a suspension proceeding against a third-party servicer, each institution that contracts with the servicer of the final decision. If the Secretary suspends the institution's participation or servicer's eligibility, the suspension takes effect on the later of—
(i) The day that the institution or servicer receives the notice; or
(ii) The date specified in the designated department official's original notice of intent to suspend the institution's participation or servicer's eligibility.
(3) A suspension may not exceed 60 days unless a designated department
(c)(1) In a fine, limitation, or termination proceeding, the hearing official's initial decision automatically becomes the Secretary's final decision 30 days after the initial decision is issued and received by both parties unless, within that 30-day period, the institution or servicer, as applicable, or the designated department official appeals the initial decision to the Secretary.
(2)(i) A party may appeal the hearing official's initial decision by submitting to the Secretary, within 30 days after the party receives the initial decision, a brief or other written statement that explains why the party believes that the Secretary should reverse or modify the decision of the hearing official.
(ii) At the time the party files its appeal submission, the party shall provide a copy of that submission to the opposing party.
(iii) The opposing party shall submit its brief or other responsive statement to the Secretary, with a copy to the appellant, within 30 days after the opposing party receives the appellant's brief or written statement.
(iv) The appealing party may submit proposed findings of fact or conclusions of law. However, the proposed findings of fact must be supported by—
(A) The evidence introduced into the record at the hearing;
(B) Stipulations of the parties if the hearing consisted of written submissions; or
(C) Matters that may be judicially noticed.
(v) Neither party may introduce new evidence on appeal.
(vi) The initial decision of the hearing official imposing a fine or limiting or terminating the institution's participation or servicer's eligibility does not take effect pending the appeal.
(vii) The Secretary renders a final decision. The Secretary may delegate to a designated department official the functions described in paragraph (c)(2) (vii) through (ix) of this section.
(viii) In rendering a final decision, the Secretary considers only evidence introduced into the record at the hearing and facts agreed to by the parties if the hearing consisted only of written submissions and matters that may be judicially noticed.
(ix) If the hearing official finds that a termination is warranted pursuant to paragraph (a)(3) of this section, the Secretary may affirm, modify, or reverse the initial decision, or may remand the case to the hearing official for further proceedings consistent with the Secretary's decision. If the Secretary affirms the initial decision without issuing a statement of reasons, the Secretary adopts the opinion of the hearing official as the decision of the Secretary. If the Secretary modifies, remands, or reverses the initial decision, in whole or in part, the Secretary's decision states the reasons for the action taken.
(a)
(2) Documents filed by facsimile transmission must be transmitted to the designated department official identified, either in the notice initiating the action, or, for an appeal, in instructions provided by the hearing official, as the individual responsible to receive them. A party filing a document by facsimile transmission must confirm that a complete and legible copy of the document was received by the Department of Education, and may
(3) The Secretary discourages the use of facsimile transmission for documents longer than five pages.
(4) If agreed upon by the parties, service of a document required to be served on another party may be made upon the other party by facsimile transmission.
(b)
(2) The date on which a request for a show-cause opportunity, a request for a hearing, other material submitted in response to a notice of action under this subpart, a decision by a hearing official, or a notice of appeal is received is, as applicable—
(i) The date of receipt evidenced on the original receipt for a document sent by certified mail.
(ii) The date following the date recorded by the delivery service as the date material was sent for a document sent by next-day delivery service.
(iii) The date a document sent by regular mail is recorded, according to the regular business practice of the office receiving the document, as received.
(iv) The date a document sent by facsimile transmission is recorded as received by the facsimile equipment that receives the transmission.
(c)
(a) In determining the amount of a fine, the designated department official, hearing official, and Secretary take into account—
(1) (i) The gravity of an institution's or third-party servicer's violation or failure to carry out the relevant statutory provision, regulatory provision, special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA; or
(ii) The gravity of the institution's or servicer's misrepresentation;
(2) The size of the institution;
(3) The size of the servicer's business, including the number of institutions and students served by the servicer;
(4) In the case of a violation by a third-party servicer, the extent to which the servicer can document that the institution contributed to that violation; and
(5) For purposes of assessing a fine on a third-party servicer, the extent to which—
(i) Violations are caused by repeated mechanical systemic unintentional errors. The Secretary counts the total of violations caused by a repeated mechanical systemic unintentional error as a single violation, unless the servicer has been cited for a similar violation previously and had failed to make the appropriate corrections to the system; and
(ii) The financial loss of Title IV, HEA program funds was attributable to a repeated mechanical systemic unintentional error.
(b) In determining the gravity of the institution's or servicer's violation, failure, or misrepresentation under paragraph (a) of this section, the designated department official, hearing official, and Secretary take into account the amount of any liability owed by the institution and any third-party servicer that contracts with the institution, and the number of students affected as a result of that violation, failure, or misrepresentation on—
(1) Improperly expended or unspent Title IV, HEA program funds received by the institution or servicer, as applicable; or
(2) Required refunds, including the treatment of title IV, HEA program funds when a student withdraws under § 668.22.
(c) Upon the request of the institution or third-party servicer, the Secretary may compromise the fine.
(d)(1) Notwithstanding any other provision of statute or regulation, any individual described in paragraph (d)(2)
(2) The individual subject to the penalty described in paragraph (d)(1) is any individual who—
(i) The Secretary determines, in accordance with § 668.174(c), exercises substantial control over an institution participating in, or seeking to participate in, a program under this title;
(ii) Is required under § 668.22 to return title IV program funds to a lender or to the Secretary on behalf of a student or borrower, or was required under § 668.22 in effect on June 30, 2000 to return title IV program funds to a lender or to the Secretary on behalf of a student or borrower; and
(iii) Willfully fails to return those funds or willfully attempts in any manner to evade that payment.
A limitation may include, as appropriate to the Title IV, HEA program in question—
(a) A limit on the number or percentage of students enrolled in an institution who may receive Title IV, HEA program funds;
(b) A limit, for a stated period of time, on the percentage of an institution's total receipts from tuition and fees derived from Title IV, HEA program funds;
(c) A limit on the number or size of institutions with which a third-party servicer may contract;
(d) A limit on the number of borrower or loan accounts that a third-party servicer may service under a contract with an institution;
(e) A limit on the responsibilities that a third-party servicer may perform under a contract with an institution;
(f) A requirement for a third-party servicer to perform additional responsibilities under a contract with an institution;
(g) A requirement that an institution obtain surety, in a specified amount, to assure its ability to meet its financial obligations to students who receive Title IV, HEA program funds;
(h) A requirement that a third-party servicer obtain surety, in a specified amount, to assure the servicer's ability to meet the servicer's financial obligations under a contract; or
(i) Other conditions as may be determined by the Secretary to be reasonable and appropriate.
(a)
(2) Ends the authority of a third-party servicer to administer any aspect of any institution's participation in that program;
(3) Prohibits an institution or third-party servicer, as applicable, or the Secretary from making or increasing awards under that program;
(4) Prohibits an institution or third-party servicer, as applicable, from making any other new commitments of funds under that program; and
(5) If an institution's participation in the Federal Stafford Loan Program or Federal PLUS programs has been terminated, prohibits further guarantee commitments by the Secretary for loans under that program to students to attend that institution, and, if the institution is a lender under that program, prohibits further disbursements by the institution (whether or not guarantee commitments have been issued by the Secretary or a guaranty agency for those disbursements).
(b) After its participation in a Title IV, HEA program has been terminated, an institution may disburse or deliver
(c) If a third-party servicer's eligibility is terminated, the servicer must return to each institution that contracts with the servicer any funds received by the servicer under the applicable Title IV, HEA program on behalf of the institution or the institution's students or otherwise dispose of those funds under instructions from the Secretary. The servicer also must return to each institution that contracts with the servicer all records pertaining to the servicer's administration of that program on behalf of that institution.
(a) The designated department official, hearing official, or Secretary may require an institution or third-party servicer to take reasonable and appropriate corrective action to remedy the institution's or servicer's violation, as applicable, of any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA.
(b) The corrective action may include payment of any funds to the Secretary, or to designated recipients, that the institution or servicer, as applicable, improperly received, withheld, disbursed, or caused to be disbursed. Corrective action may, for example, relate to—
(1) With respect to the Federal Stafford Loan, Federal PLUS, and Federal SLS programs—
(i) Ineligible interest benefits, special allowances, or other claims paid by the Secretary; and
(ii) Discounts, premiums, or excess interest paid in violation of 34 CFR part 682; and
(2) With respect to all Title IV, HEA programs—
(i) Refunds or returns of title IV, HEA program funds required under program regulations when a student withdraws.
(ii) Any grants, work-study assistance, or loans made in violation of program regulations.
(c) If any final decision requires an institution or third-party servicer to reimburse or make any other payment to the Secretary, the Secretary may offset these claims against any benefits or claims due to the institution or servicer.
(d) If an institution's violation in paragraph (a) of this section results from an administrative, accounting, or recordkeeping error, and that error was not part of a pattern of error, and there is no evidence of fraud or misconduct related to the error, the Secretary permits the institution to correct or cure the error. If the institution corrects or cures the error, the Secretary does not limit, suspend, terminate, or fine the institution for that error.
(a)(1) An institution whose participation in a Title IV, HEA program has been terminated may file a request for reinstatement of that participation.
(2) A third-party servicer whose eligibility to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program has been terminated may file a request for reinstatement of that eligibility.
(b) An institution whose participation has been terminated or a third-party servicer whose eligibility has been terminated may request reinstatement only after the later of the expiration of—
(1) Eighteen months from the effective date of the termination; or
(2) A debarment or suspension under Executive Order 12549 (3 CFR, 1986 Comp., p. 189) or the Federal Acquisition Regulations, 48 CFR part 9, subpart 9.4.
(c) To be reinstated, an institution or third-party servicer must submit its request for reinstatement in writing to the Secretary and must—
(1) Demonstrate to the Secretary's satisfaction that it has corrected the violation or violations on which its termination was based, including payment in full to the Secretary or to other recipients of funds that the institution or servicer, as applicable, has improperly received, withheld, disbursed, or caused to be disbursed;
(2) Meet all applicable requirements of this part; and
(3) In the case of an institution, enter into a new program participation agreement with the Secretary.
(d) The Secretary, within 60 days of receiving the reinstatement request—
(1) Grants the request;
(2) Denies the request; or
(3) Grants the request subject to a limitation or limitations.
(a) An institution whose participation in a Title IV, HEA program has been limited may not apply for removal of the limitation before the expiration of 12 months from the effective date of the limitation.
(b) A third-party servicer whose eligibility to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program has been limited may request removal of the limitation.
(c) The institution or servicer may not apply for removal of the limitation before the later of the expiration of—
(1) Twelve months from the effective date of the limitation; or
(2) A debarment or suspension under Executive Order 12549 (3 CFR, 1986 Comp., p. 189) or the Federal Acquisition Regulations, 48 CFR part 9, subpart 9.4.
(d) If the institution or servicer requests removal of the limitation, the request must be in writing and show that the institution or servicer, as applicable, has corrected the violation or violations on which the limitation was based.
(e) No later than 60 days after the Secretary receives the request, the Secretary responds to the institution or servicer—
(1) Granting its request;
(2) Denying its request; or
(3) Granting the request subject to other limitation or limitations.
(f) If the Secretary denies the request or establishes other limitations, the Secretary grants the institution or servicer, upon the institution's or servicer's request, an opportunity to show cause why the participation or eligibility, as applicable, should be fully reinstated.
(g) The institution's or servicer's request for an opportunity to show cause does not waive—
(1) The institution's right to participate in any or all Title IV, HEA programs if it complies with the continuing limitation or limitations pending the outcome of the opportunity to show cause; and
(2) The servicer's right to contract with any institution to administer any aspect of the institution's participation in any Title IV, HEA program, if the servicer complies with the continuing limitation pending the outcome of the opportunity to show cause.
(a) A ruling by a hearing official may not be appealed to the Secretary until the issuance of an initial decision, except that the Secretary may, at any time prior to the issuance of the initial decision, grant a review of a ruling upon either a certification by a hearing official of the ruling to the Secretary for review or the filing of a petition for review of a ruling by one or both of the parties, if—
(1) That ruling involves a controlling question of substantive or procedural law; and
(2) The immediate resolution of the question will materially advance the final disposition of the proceeding or subsequent review will be an inadequate remedy.
(b)(1) A petition for interlocutory review of an interim ruling must include the following:
(i) A brief statement of the facts necessary to an understanding of the issue on which review is sought.
(ii) A statement of the issue.
(iii) A statement of the reasons showing that the ruling complained of involves a controlling question of substantive or procedural law and why immediate review of the ruling will materially advance the disposition of the case, or why subsequent review will be an inadequate remedy.
(2) A petition may not exceed ten pages, double-spaced, and must be filed with a copy of the ruling and any findings and opinions relating to the ruling.
(c) A copy of the petition must be provided to the hearing official at the time of filing with the secretary, and a copy of a petition or any certification must be served upon the parties by certified mail, return receipt requested. The petition or certification must reflect this service.
(d) If a party files a petition under this section, the hearing official may state to the Secretary a view as to whether review is appropriate or inappropriate by submitting a brief statement addressing the party's petition within 10 days of the receipt of that petition by the hearing official. A copy of the statement must be served on all parties by certified mail, return receipt requested.
(e) A party's response to a petition or certification for interlocutory review must be filed within seven days after service of the petition or statement, as applicable, and may not exceed ten pages, double-spaced, in length. A copy of the response must be served on the parties and the hearing official by hand delivery or regular mail.
(f) The filing of a petition for interlocutory review does not automatically stay the proceedings. A stay during consideration of a petition for review may be granted by the hearing official if that official has certified or stated to the Secretary that review of the ruling is appropriate. The Secretary may order a stay of proceedings at any time after the filing of a request for interlocutory review.
(g) The Secretary notifies the parties if a petition or certification for interlocutory review is accepted, and may provide the parties a reasonable time within which to submit written argument with regard to the merit of the petition or certification.
(h) If the Secretary takes no action on a petition or certification for review within 15 days of receipt of it, the request is deemed to be denied.
(i) The Secretary may affirm, modify, set aside, or remand the interim ruling of the hearing official.
(j) The Secretary may delegate to a designated department official the functions described in paragraphs (f) through (i) of this section.
(a) This subpart establishes rules governing the appeal by an institution or third-party servicer from a final audit determination or a final program review determination arising from an audit or program review of the institution's participation in any Title IV, HEA program or of the servicer's administration of any aspect of an institution's participation in any Title IV, HEA program.
(b) This subpart applies to any participating institution or third-party servicer that appeals a final audit determination or final program review determination.
(c) This subpart does not apply to proceedings governed by subpart G of this part or to a determination that—
(1) An institution fails to meet the applicable statutory definition set forth in sections 435, 481, or 1201 of the HEA, except to the extent that such a determination forms the basis of a
(2) An institution fails to qualify for certification to participate in the title IV, HEA programs because it does not meet the fiscal and administrative standards set forth in subpart B of this part, except to the extent that such a determination forms the basis of a final audit determination or a program review determination.
The following definitions apply to this subpart:
(a)
(1) An institution's participation in any or all of the Title IV, HEA programs; or
(2) A third-party servicer's administration of any aspect of an institution's participation in any or all of the Title IV, HEA programs.
(b)
(1) An institution's participation in any or all of the Title IV, HEA programs; or
(2) A third-party servicer's administration of any aspect of an institution's participation in any Title IV, HEA program.
(a) An institution or third-party servicer seeking the Secretary's review of a final audit determination or a final program review determination shall file a written request for review with the designated department official.
(b) The institution or servicer shall file its request for review and any records or materials admissible under the terms of § 668.116(e) and (f), no later than 45 days from the date that the institution or servicer receives the final audit determination or final program review determination.
(c) The institution or servicer shall attach to the request for review a copy of the final audit determination or final program review determination, and shall—
(1) Identify the issues and facts in dispute; and
(2) State the institution's or servicer's position, as applicable, together with the pertinent facts and reasons supporting that position.
(d)(1) If an institution's violation that resulted in the final audit determination or final program review determination in paragraph (a) of this section results from an administrative, accounting, or recordkeeping error, and that error was not part of a pattern of error, and there is no evidence of fraud or misconduct related to the error, the Secretary permits the institution to correct or cure the error.
(2) If the institution is charged with a liability as a result of an error described in paragraph (d)(1) of this section, the institution cures or corrects that error with regard to that liability if the cure or correction eliminates the basis for the liability.
(a) Upon receipt of an institution's or third-party servicer's request for review, the designated department official arranges for a hearing before a hearing official.
(b) Within 30 days of the designated department official's receipt of an institution's or third-party servicer's request for review, the hearing official notifies the designated department official and the parties to the proceeding of the schedule for the submission of briefs by both the designated department official and, as applicable, the institution or servicer.
(c) The hearing official schedules the submission of briefs and of accompanying evidence admissible under the
(a) In the event that the hearing official considers a prehearing conference necessary, he may convene a prehearing conference.
(b) The purpose of a prehearing conference is to allow the parties to settle or narrow the dispute. A prehearing conference consists of—
(1) A telephone conference call;
(2) An informal meeting of the parties with the hearing official; or
(3) The submission and exchange of written materials by the parties.
(c) All prehearing conferences requiring appearances by the parties shall take place in the Washington, D.C. metropolitan area.
(a) A hearing is a process conducted by the hearing official whereby an orderly presentation of arguments and evidence is made by the parties.
(b) The hearing process consists of the submission of written briefs to the hearing official by the institution or third-party servicer, as applicable, and by the designated department official, unless the hearing official determines, under paragraph (g) of this section, that an oral hearing is also necessary.
(c) Each party shall provide a copy of its brief and any accompanying materials to the opposing party simultaneously with the filing of its brief and materials with the hearing official.
(d) An institution or third-party servicer requesting review of the final audit determination or final program review determination issued by the designated department official shall have the burden of proving the following matters, as applicable:
(1) That expenditures questioned or disallowed were proper.
(2) That the institution or servicer complied with program requirements.
(e)(1) A party may submit as evidence to the hearing official only materials within one or more of the following categories:
(i) Department of Education audit reports and audit work papers for audits performed by the department's Office of Inspector General.
(ii) In the case of an institution, institutional audit work papers, records, and other materials, if the institution provided those work papers, records, or materials to the Department of Education no later than the date by which the institution was required to file its request for review in accordance with § 668.113.
(iii) In the case of a third-party servicer, the servicer's audit work papers and the records and other materials of the servicer or any institution that contracts with the servicer, if the servicer provided those work papers, records, or materials to the Department of Education no later than the date that the servicer was required to file the request for review under § 668.113.
(iv) Department of Education program review reports and work papers for program reviews.
(v) Institutional or servicer records and other materials (including records and other materials of any institution that contracts with the servicer) provided to the Department of Education in response to a program review, if the records or materials were provided to the Department of Education by the institution or servicer no later than the date by which the institution or servicer was required to file its request for review in accordance with § 668.113.
(vi) Other Department of Education records and materials if the records and materials were provided to the hearing official no later than 30 days after the institution's or servicer's filing of its request for review.
(2) A party desiring to submit as evidence any materials described in paragraph (e)(1) of this section shall submit that evidence with its initial brief.
(f) The hearing official accepts only evidence that is both admissible and timely under the terms of paragraph (e) of this section, and relevant and
(1) Evidence relating to a period of time other than the period of time covered by the audit or program review;
(2) Evidence relating to an audit or program review of an institution or third-party servicer other than the institution or servicer bringing the appeal, or the resolution thereof; and
(3) Evidence relating to the current practice of the institution or servicer bringing the appeal in the program areas at issue in the appeal.
(g)(1) The hearing official may schedule an oral argument if he or she determines that an oral argument is necessary to clarify the issues and the positions of the parties as presented in the parties’ written submissions.
(2) In the event that an oral argument is conducted, the designated department official makes a transcribed record of the proceedings and makes one copy of that record available to each of the parties to the proceeding.
(h) Any oral argument shall take place in the Washington, DC metropolitan area.
(i) Either party may be represented by counsel.
(a) The hearing official regulates the course of the proceedings and the conduct of the parties following a request for review and takes all steps necessary to conduct fair and impartial proceedings.
(b) The hearing official is not authorized to issue subpoenas or compel discovery as provided for in the Federal Rules of Civil Procedure.
(c) The hearing official shall take whatever measures are appropriate to expedite the proceedings. These measures may include, but are not limited to, one or more of the following:
(1) Scheduling of conferences.
(2) Setting time limits for oral arguments and the submission of briefs.
(3) Terminating the hearing process and issuing a decision against a party if that party does not meet time limits established by the hearing official.
(d) The hearing official is bound by all applicable statutes and regulations. The hearing official may not—
(1) Waive applicable statutes and regulations; or
(2) Rule them invalid.
(a) Upon review of the parties’ written submissions and termination of the oral argument if one is held, the hearing official issues a written decision.
(b) The hearing official's decision states and explains whether the final audit determination or final program review determination issued by the designated ED official was supportable, in whole or in part.
(c) The hearing official bases any findings of fact only on evidence properly presented before him, on matters given official notice, or on facts stipulated to by the parties.
(a) Within 30 days of its receipt of the initial decision of the hearing official, a party wishing to appeal the decision shall submit a brief or other written material to the Secretary explaining why the decision of the hearing official should be overturned or modified.
(b) The party appealing the initial decision shall, simultaneously with its filing of the appeal, provide the opposing party with a copy of its brief or other written material.
(c) In its brief to the Secretary, the party appealing the initial decision may submit proposed findings of fact or conclusions of law. However, the proposed findings of fact must be supported by—
(1) The admissible evidence already in the record;
(2) Matters that may be given official notice; or
(3) Stipulations of the parties
(d) The opposing party shall file its response to the appeal, if any, with the Secretary within 30 days of that party's receipt of the appeal to the Secretary.
(e) The opposing party shall, simultaneously with the filing of any response, provide a copy of its response to the appeal to the party appealing the initial decision.
(f) Neither party may introduce new evidence on appeal.
(a)(1) The Secretary issues a final decision. The Secretary may affirm, modify, or reverse the decision of the hearing official, or may remand the case to the hearing official for further proceedings consistent with the Secretary's decision.
(2) The Secretary may delegate the performance of functions under this section to a designated department official.
(b) If the Secretary modifies, remands, or overturns the initial decision of the hearing official, the Secretary issues a decision that—
(1) Includes a statement of the reasons for this action;
(2) Is provided to both parties; and
(3) Unless the decision is remanded to the hearing official for further review or determination of fact, becomes final upon its issuance.
(a) In the event that the initial decision of the hearing official is appealed, the decision of the Secretary is the final decision of the Department, unless the hearing official's decision is remanded by the Secretary.
(b) In the event that the initial decision of the hearing official is not appealed within the time limit specified in § 668.119(a), the initial decision automatically becomes the final decision of the Department.
(a) The request for review, appeals, and other written submissions referred to in this subpart may be either hand-delivered or mailed.
(b) All mailed written submissions referred to in this subpart shall be mailed by certified mail, return receipt requested.
(c) Determination of filing, receipt, or submission dates shall be based on either the date of hand-delivery or the date of receipt indicated on the original U.S. Postal Service return receipt.
To the extent that the decision of the Secretary sustains the final audit determination or program review determination, subject to the provisions of § 668.24(c)(3), the Department of Education will take steps to collect the debt at issue or otherwise effect the determination that was subject to the request for review.
(a) A ruling by a hearing official may not be appealed to the Secretary until the issuance of an initial decision, except that the Secretary may, at any time prior to the issuance of the initial decision, grant a review of a ruling upon either a certification by a hearing official of the ruling to the Secretary for review or the filing of a petition for review of a ruling by one or both of the parties, if—
(1) That ruling involves a controlling question of substantive or procedural law; and
(2) The immediate resolution of the question will materially advance the final disposition of the proceeding or subsequent review will be an inadequate remedy.
(b)(1) A petition for interlocutory review of an interim ruling must include the following:
(i) A brief statement of the facts necessary to an understanding of the issue on which review is sought.
(ii) A statement of the issue.
(iii) A statement of the reasons showing that the ruling complained of involves a controlling question of substantive or procedural law and why immediate review of the ruling will materially advance the disposition of the case, or why subsequent review will be an inadequate remedy.
(2) A petition may not exceed ten pages, double-spaced, and must be filed with a copy of the ruling and any findings and opinions relating to the ruling.
(c) A copy of the petition must be provided to the hearing official at the time of filing with the Secretary, and a copy of a petition or any certification must be served upon the parties by certified mail, return receipt requested. The petition or certification must reflect this service.
(d) If a party files a petition under this section, the hearing official may state to the Secretary a view as to whether review is appropriate or inappropriate by submitting a brief statement addressing the party's petition within 10 days of the receipt of that petition by the hearing official. A copy of the statement must be served on all parties by certified mail, return receipt requested.
(e) A party's response to a petition or certification for interlocutory review must be filed within seven days after service of the petition or statement, as applicable, and may not exceed ten pages, double-spaced, in length. A copy of the response must be served on the parties and the hearing official by hand delivery or regular mail.
(f) The filing of a petition for interlocutory review does not automatically stay the proceedings. A stay during consideration of a petition for review may be granted by the hearing official if that official has certified or stated to the Secretary that review of the ruling is appropriate. The Secretary may order a stay of proceedings at any time after the filing of a request for interlocutory review.
(g) The Secretary notifies the parties if a petition or certification for interlocutory review is accepted, and may provide the parties a reasonable time within which to submit written argument with regard to the merit of the petition or certification.
(h) If the Secretary takes no action on a petition or certification for review within 15 days of receipt of it, the request is deemed to be denied.
(i) The Secretary may affirm, modify, set aside, or remand the interim ruling of the hearing official.
(j) The Secretary may delegate to a designated department official the functions described in paragraphs (f) through (i) of this section.
20 U.S.C. 1091, 1092, and 1094, unless otherwise noted.
(a)
(b)
The following definitions apply to this subpart:
(a) Except as provided in § 668.133(a)(1)(ii), the institution shall determine a student to be an eligible noncitizen if the institution receives an output document for that student establishing that—
(1) The INS has confirmed the student's immigration status; and
(2) The student's immigration status meets the noncitizen eligibility requirements of § 668.33(a)(2).
(b) If an institution determines a student to be an eligible noncitizen in accordance with paragraph (a) of this section, the institution may not require the student to produce the documentation otherwise required under § 668.33(a)(2).
(a)
(1) The institution—
(i) Receives an output document indicating that the student must provide the institution with evidence of the student's immigration status required under § 668.33(a)(2); or
(ii) Receives an output document that satisfies the requirements of § 668.132(a) (1) and (2), but the institution—
(A) Has documentation that conflicts with immigration-status documents submitted by the student or the immigration status reported on the output document; or
(B) Has reason to believe that the immigration status reported by the student or on the output document is incorrect; and
(2) The institution determines that the immigration-status documents submitted by the student constitute reasonable evidence of the student's claim to be an eligible noncitizen.
(b)
(i) Demonstrates eligibility under the provisions of § 668.33 (a)(1) or (b); or
(ii) Demonstrated eligibility under the provisions of § 668.33(a)(2) in a previous award year as a result of secondary confirmation and the documents used to establish that eligibility have not expired; and
(iii) The institution does not have conflicting documentation or reason to believe that the student's claim of citizenship or immigration status is incorrect.
(2) [Reserved]
(a) An institution shall establish and use written policies and procedures for requesting proof and securing confirmation of the immigration status of applicants for title IV, HEA student financial assistance who claim to meet the eligibility requirements of § 668.33(a)(2). These policies and procedures must include—
(1) Providing the student a deadline by which to provide the documentation that the student wishes to have considered to support the claim that the student meets the requirements of § 668.33(a)(2);
(2) Providing to the student information concerning the consequences of a failure to provide the documentation by the deadline set by the institution; and
(3) Providing that the institution will not make a determination that the student is not an eligible noncitizen until the institution has provided the student the opportunity to submit the documentation in support of the student's claim of eligibility under § 668.33(a)(2).
(b) An institution shall furnish, in writing, to each student required to undergo secondary confirmation—
(1) A clear explanation of the documentation the student must submit as evidence that the student satisfies the requirements of § 668.33(a)(2); and
(2) A clear explanation of the student's responsibilities with respect to the student's compliance with § 668.33(a)(2), including the deadlines for completing any action required under this subpart and the consequences of failing to complete any required action, as specified in § 668.137.
Within 10 business days after an institution receives the documentary evidence of immigration status submitted by a student required to undergo secondary confirmation, the institution shall—
(a) Complete the request portion of the INS Document Verification Request Form G-845;
(b) Copy front and back sides of all immigration-status documents received from the student and attach copies to the Form G-845; and
(c) Submit Form G-845 and attachments to the INS District Office.
(a) Except as provided in paragraphs (b) and (c) of this section, an institution that has requested secondary confirmation under § 668.133(a) shall make its determination concerning a student's eligibility under § 668.33(a)(2) by relying on the INS response to the Form G-845.
(b) An institution shall make its determination concerning a student's eligibility under § 668.33(a)(2) pending the institution's receipt of an INS response to the institution's Form G-845 request concerning that student, if—
(1) The institution has given the student an opportunity to submit documents to the institution to support the student's claim to be an eligible noncitizen;
(2) The institution possesses sufficient documentation concerning a student's immigration status to make that determination;
(3) At least 15 business days have elapsed from the date that the institution sent the Form G-845 request to the INS;
(4) The institution has no documentation that conflicts with the immigration-status documentation submitted by the student; and
(5) The institution has no reason to believe that the immigration status reported by the applicant is incorrect.
(c) An institution shall establish and use policies and procedures to ensure that, if the institution has disbursed or released title IV, HEA funds to the student in the award year or employed the student under the Federal Work-Study Program, and the institution determines, in reliance on the INS response to the institution's request for secondary confirmation regarding that student, that the student was in fact not an eligible noncitizen during that award year, the institution provides the student with notice of the institution's determination, an opportunity to contest the institution's determination, and notice of the institution's final determination.
(a) A student shall submit before a deadline specified by the institution all documentation the student wishes to have considered to support a claim that the student meets the requirements of § 668.33(a)(2). The deadline, set by the institution, must be not less than 30 days from the date the institution receives the student's output document.
(b) If a student fails to submit the documentation by the deadline established in accordance with paragraph (a) of this section, the institution may not disburse to the student, or certify the student as eligible for, any title IV, HEA program funds for that period of enrollment or award year; employ the student under the Federal Work-Study Program; certify a Federal Stafford or Federal PLUS loan application, or originate a Direct Loan Program loan application for the student for that period of enrollment.
(a) A student is liable for any LEAP, FSEOG, or Federal Pell Grant payment and for any Federal Stafford, Direct Subsidized, Direct Unsubsidized or Federal Perkins loan made to him or her if the student was ineligible for the Title IV, HEA assistance.
(b) A Federal PLUS or Direct PLUS Loan borrower is liable for any Federal PLUS or Direct PLUS Loan made to him or her on behalf of an ineligible student.
(c) The Secretary does not take any action against an institution with respect to an error in the institution's determination that a student is an eligible noncitizen if, in making that determination, the institution followed the provisions in this subpart and relied on—
(1) An output document for that student indicating that the INS has confirmed that the student's immigration status meets the eligibility requirements for title IV, HEA assistance;
(2) An INS determination of the student's immigration status and the authenticity of the student's immigration documents provided in response to the institution's request for secondary confirmation; or
(3) Immigration-status documents submitted by the student and the institution did not have reason to believe that the documents did not support the student's claim to be an eligible noncitizen.
(d) Except as provided in paragraph (c) of this section, if an institution makes an error in its determination that a student is an eligible noncitizen, the institution is liable for any title IV, HEA disbursements made to this student during the award year or period of enrollment for which the student applied for title IV, HEA assistance.
(a) If an institution makes a payment of a grant or a disbursement of a Federal Perkins loan to an ineligible student for which it is not liable in accordance with § 668.138, it shall assist the Secretary in recovering the funds by—
(1) Making a reasonable effort to contact the student; and
(2) Making a reasonable effort to collect the payment or Federal Perkins loan.
(b) If an institution causes a Federal Stafford, Federal PLUS, Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan to be disbursed to or on behalf of an ineligible student for which it is not liable in accordance with § 668.138, it shall assist the Secretary in recovering the funds by notifying the lender in the case of an FFEL Program loan or the Secretary in the case of a Direct Loan Program loan that the student has failed to establish eligibility under the requirements of §§ 668.201 or 685.200, as appropriate.
(c) If an institution is liable for a payment of a grant or Federal Perkins loan to an ineligible student, the institution shall restore the amount equal to the payment or disbursement to the institution's Federal Perkins loan fund or Federal Pell Grant, Federal SEOG, or LEAP amount, even if the institution cannot collect the payment or disbursement from the student.
(d) If an institution is liable for a Federal Stafford, Federal PLUS, Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan disbursement to an ineligible student, the institution shall repay an amount equal to the disbursement to the lender in the case of an FFEL Program loan or the Secretary in the case of a Direct Loan Program loan, and provide written notice to the borrower.
(a) This subpart sets forth the provisions under which a student who has neither a high school diploma nor its recognized equivalent may become eligible to receive Title IV, HEA program funds by—
(1) Achieving a passing score, specified by the Secretary, on an independently administered test approved by the Secretary under this subpart; or
(2) Being enrolled in an eligible institution that participates in a State process approved by the Secretary under this subpart.
(b) Under this subpart, the Secretary sets forth—
(1) The procedures and criteria the Secretary uses to approve tests;
(2) The basis on which the Secretary specifies a passing score on each approved test;
(3) The procedures and conditions under which the Secretary determines that an approved test is independently administered; and
(4) The procedures and conditions under which the Secretary determines that a State process demonstrates that students in the process have the ability to benefit from the education and training being offered to them.
The following definitions apply to this subpart:
(1) Is located at an eligible institution that provides two-year or four-year degrees, or qualifies as an eligible public vocational institution,
(2) Is responsible for gathering and evaluating information about individual students for multiple purposes, including appropriate course placement;
(3) Is independent of the admissions and financial aid processes at the institution at which it is located;
(4) Is staffed by professionally trained personnel; and
(5) Does not have as its primary purpose the administration of ability-to-benefit tests.
(a) The Secretary approves tests or other assessments submitted by a State that the State uses to measure a student's skills and abilities for the purpose of determining whether the student has the skills and abilities the State expects of a high school graduate in that State.
(b) The Secretary approves passing scores or other methods of evaluation established by the State for each test or assessment described in paragraph (a) of this section.
(c) If the Secretary approves a State's tests and assessments and the passing scores on those tests and assessments under paragraphs (a) and (b) of this section, that test or assessment may be used, for purposes of section 484(d) of the HEA, only for students who attend eligible institutions located in that State.
(d) If a State wishes to have the Secretary approve its tests or assessments under this section, the State shall—
(1) Submit to the Secretary those tests and assessments, its passing scores on those tests and assessments, and the educational standards those tests and assessments measure at such time and in such manner as the Secretary may prescribe;
(2) Provide the Secretary with an explanation of how the tests, assessments, and passing scores are appropriate in light of the State's educational standards; and
(3) Provide the Secretary with an assurance that the tests and assessments will be administered in an independent, fair, and secure manner.
Except as provided in § 668.143—
(a) The Secretary only reviews tests under this subpart that are submitted by the publisher of that test;
(b) A test publisher that wishes to have its test approved by the Secretary under this subpart must submit an application to the Secretary at such time and in such manner as the Secretary may prescribe. The application shall contain all the information necessary for the Secretary to approve the test under this subpart, including but not
(c) A test publisher shall include with its application—
(1) A summary of the precise editions, forms, levels, and (if applicable) sub-tests and abbreviated tests for which approval is being sought;
(2) The name, address, and telephone number of a contact person to whom the Secretary may address inquiries;
(3) Each edition and form of the test for which the publisher requests approval;
(4) The distribution of test scores for each edition, form, level, sub-test, or partial battery, for which approval is sought, that allows the Secretary to prescribe the passing score for each test in accordance with § 668.147;
(5) Documentation of test development, including a history of the test's use;
(6) Norming data and other evidence used in determining the distribution of test scores;
(7) Material that defines the content domains addressed by the test;
(8) For tests first published five years or more before the date submitted to the Secretary for review and approval, documentation of periodic reviews of the content and specifications of the test to ensure that the test continues to reflect secondary school level verbal and quantitative skills;
(9) If a test has been revised from the most recent edition approved by the Secretary, an analysis of the revisions, including the reasons for the revisions, the implications of the revisions for the comparability of scores on the current test to scores on the previous test, and data from validity studies of the test undertaken subsequent to the revisions;
(10) A description of the manner in which test-taking time was determined in relation to the content representativeness requirements in § 668.146(b)(2), and an analysis of the effects of time on performance;
(11) A technical manual that includes—
(i) An explanation of the methodology and procedures for measuring the reliability of the test;
(ii) Evidence that different forms of the test, including, if applicable, short forms, are comparable in reliability;
(iii) Other evidence demonstrating that the test permits consistent assessment of individual skill and ability;
(iv) Evidence that the test was normed using—
(A) Groups that were of sufficient size to produce defensible standard errors of the mean and were not disproportionately composed of any race or gender; and
(B) A contemporary population representative of persons who are beyond the usual age of compulsory school attendance in the United States;
(v) Documentation of the level of difficulty of the test;
(vi) Unambiguous scales and scale values so that standard errors of measurement can be used to determine statistically significant differences in performance; and
(vii) Additional guidance on the interpretation of scores resulting from any modifications of the tests for persons with documented disabilities.
(12) The manual provided to test administrators containing procedures and instructions for test security and administration, and the forwarding of tests to the test publisher;
(13) An analysis of the item-content of each edition, form, level, and (if applicable) sub-test to demonstrate compliance with the required secondary school level criterion specified in § 668.146(b);
(14) For performance-based tests or tests containing performance-based sections, a description of the training or certification required of test administrators and scorers by the test publisher;
(15) A description of retesting procedures and the analysis upon which the criteria for retesting are based; and
(16) Other evidence establishing the test's compliance with the criteria for approval of tests as provided in § 668.146.
Except as provided in § 668.143—
(a)(1) When the Secretary receives a complete application from a test publisher, the Secretary selects experts in the field of educational testing and assessment, who possess appropriate advanced degrees and experience in test development or psychometric research, to determine whether the test meets the requirements for test approval contained in §§ 668.146, 668.147, 668.148, or 668.149, as appropriate, and to advise the Secretary of their determinations;
(2) If the test involves a language other than English, the Secretary selects at least one individual described in paragraph (a)(1) of this section who is fluent in the language in which the test is written to advise the Secretary on whether the test meets the additional criteria, provisions, and conditions for test approval contained in §§ 668.148 and 668.149;
(b) The Secretary determines whether the test publisher's test meets the criteria and requirements for approval after taking the advice of the experts into account;
(c)(1) If the Secretary determines that a test satisfies the criteria and requirements for test approval, the Secretary notifies the test publisher of the Secretary's decision, and publishes the name of the test and the passing scores in the
(2) If the Secretary determines that a test does not satisfy the criteria and requirements for test approval, the Secretary notifies the test publisher of the Secretary's decision, and the reasons why the test did not meet those criteria and requirements.
(3) The test publisher may request that the Secretary reevaluate the Secretary's decision. Such a request must be accompanied by—
(i) Documentation and information that address the reasons for the non-approval of the test; and
(ii) An analysis of why the information and documentation submitted meet the criteria and requirements for test approval notwithstanding the Secretary's earlier decision to the contrary.
(d)(1) The Secretary approves a test for a period not to exceed five years from the date of the Secretary's written notice to the test publisher.
(2) The Secretary extends the approval period of a test to include the period of review if the test publisher re-submits the test for review and approval under § 668.144 at least six months before the date on which the test approval is scheduled to expire;
(e) The approval of a test may be withdrawn if the Secretary determines that the publisher violated any terms of the agreement described in § 668.150, or that the information the publisher submitted as a basis for approval of the test was inaccurate;
(f) If the Secretary revokes approval of a previously approved test, the Secretary publishes a notice of that revocation in the
(g) For test batteries that contain multiple sub-tests measuring content domains other than verbal and quantitative domains, the Secretary reviews only those subtests covering verbal and quantitative domains.
Except as provided in § 668.143—
(a) Except as provided in § 668.148, the Secretary approves a test under this subpart if the test meets the criteria set forth in paragraph (b) of this section and the test publisher satisfies the requirements set forth in paragraph (c) of this section;
(b) To be approved under this subpart, a test shall—
(1) Assess secondary school level basic verbal and quantitative skills and general learned abilities;
(2) Sample the major content domains of secondary school level verbal and quantitative skills with sufficient numbers of questions to—
(i) Adequately represent each domain; and
(ii) Permit meaningful analyses of item-level performance by students
(3) Require appropriate test-taking time to permit adequate sampling of the major content domains described in paragraph (a)(2) of this section;
(4) Have all forms (including short forms) comparable in reliability;
(5) If the test is revised, have new scales, scale values, and scores that are demonstrably comparable to the old scales, scale values, and scores; and
(6) Meet all primary and applicable conditional and secondary standards for test construction provided in the 1985 edition of the
(7) Have publisher's guidelines for retesting, including time between test-taking, be based on empirical analyses that are part of the studies of test reliability; and
(c) In order for a test to be approved under this subpart, a test publisher shall—
(1) Include in the test booklet or package—
(i) Clear, specific, and complete instructions for test administration, including information for test takers on the purpose, timing, and scoring of the test; and
(ii) Sample questions representative of the content and average difficulty of the test;
(2) Have two or more secure, equated, alternate forms of the test;
(3) Except as provided in §§ 668.148 and 668.149, provide tables of distributions of test scores which clearly indicate the mean score and standard deviation for high school graduates who have taken the test within three years prior to the date on that the test is submitted to the Secretary for approval under § 668.144;
(4) Norm the test with—
(i) Groups that were of sufficient size to produce defensible standard errors of the mean and were not disproportionately composed of any race or gender; and
(ii) A contemporary population representative of persons who are beyond the usual age of compulsory school attendance in the United States; and
(5) If test batteries include sub-tests assessing different verbal and/or quantitative skills, a distribution of test scores as described in paragraph (c)(3) of this section that allows the Secretary to prescribe either—
(i) A passing score for each sub-test; or
(ii) One composite passing score for verbal skills and one composite passing score for quantitative skills.
Except as provided in §§ 668.143, 668.148 and 668.149, to demonstrate that a test taker has the ability to benefit from the education and training offered, the Secretary specifies that the passing score on each approved test is one standard deviation below the mean for students with high school diplomas who have taken the test within three years before the date on which the test is submitted to the Secretary for approval.
Except as provided in § 668.143—
(a) In addition to satisfying the criteria in § 668.146, to be approved by the Secretary, a test or a test publisher must meet the following criteria, if applicable:
(1) In the case of a test that is performance-based, or includes performance-based sections, for measuring writing, speaking, listening, or quantitative problem-solving skills, the test publisher must provide—
(i) A minimum of four parallel forms of the test; and
(ii) A description of the training provided to test administrators, and the criteria under which trained individuals are certified to administer and score the test.
(2) In the case of a test developed for a non-native speaker of English who is enrolled in a program that is taught in his or her native language, the test must be—
(i) Linguistically accurate and culturally sensitive to the population for which the test is designed, regardless of the language in which the test is written;
(ii) Supported by documentation detailing the development of normative data;
(iii) If translated from an English version, supported by documentation of procedures to determine its reliability and validity with reference to the population for which the translated test was designed;
(iv) Developed in accordance with guidelines provided in the 1985 edition of the “Testing Linguistic Minorities” section of the
(v)(A) If the test is in Spanish, accompanied by a distribution of test scores that clearly indicates the mean score and standard deviation for Spanish-speaking students with high school diplomas who have taken the test within 5 years before the date on which the test is submitted to the Secretary for approval; and
(B) If the test is in a language other than Spanish, accompanied by a recommendation for a provisional passing score based upon performance of a sample of test takers representative of the intended population and large enough to produce stable norms.
(3) In the case of a test that is modified for use for persons with disabilities, the test publisher must—
(i) Follow guidelines provided in the “Testing People Who Have Handicapping Conditions” section of the
(ii) Provide documentation of the appropriateness and feasibility of the modifications relevant to test performance; and
(iii) Recommend passing score(s) based on the previous performance of test-takers.
(4) In the case of a computer-based test, the test publisher must—
(i) Provide documentation to the Secretary that the test complies with the basic principles of test construction and standards of reliability and validity as promulgated in the
(ii) Provide test administrators with instructions for familiarizing test takers with computer hardware prior to test-taking; and
(iii) Provide two or more parallel, equated forms of the test, or, if parallel forms are generated from an item pool, provide documentation of the methods of item selection for alternate forms; and
(b) If a test is designed solely to measure the English language competence of non-native speakers of English—
(1) The test must meet the criteria set forth in § 668.146(b)(6), and § 668.146 (c)(1), (c)(2), and (c)(4); and
(2) The test publisher must recommend a passing score based on the mean score of test takers beyond the age of compulsory school attendance who entered U.S. high school equivalency programs, formal training programs, or bilingual vocational programs.
If no test is reasonably available for persons with disabilities or students whose native language is not English and who are not fluent in English, so that no test can be approved under §§ 668.146 or 668.148 for these students, the following procedures apply:
(a)
(2) The Secretary considers the passing scores for these testing procedures or instruments to be those recommended by the test developer, provided that the test administrator—
(i) Uses those procedures or instruments;
(ii) Maintains appropriate documentation, including a description of the procedures or instruments, their content domains, technical properties, and scoring procedures; and
(iii) Observes recommended passing scores.
(b)
(1) The Secretary has not approved any test in that native language;
(2) The test was not previously rejected for approval by the Secretary;
(3) The test measures both basic verbal and quantitative skills at the secondary school level; and
(4) The passing scores and the methods for determining the passing scores are fully documented.
(a) If the Secretary approves a test under this subpart, the test publisher must enter into an agreement with the Secretary that contains the provisions set forth in paragraph (b) of this section before an institution may use the test to determine a student's eligibility for Title IV, HEA program funds.
(b) The agreement between a test publisher and the Secretary provides that the test publisher shall—
(1) Allow only test administrators that it certifies to give its test;
(2) Certify test administrators who have—
(i) The necessary training, knowledge, and skill to test students in accordance with the test publisher's testing requirements; and
(ii) The ability and facilities to keep its test secure against disclosure or release;
(3) Decertify a test administrator for a period that coincides with the period for which the publisher's test is approved if the test publisher finds that the test administrator—
(i) Has repeatedly failed to give its test in accordance with the publisher's instructions;
(ii) Has not kept the test secure;
(iii) Has compromised the integrity of the testing process; or
(iv) Has given the test in violation of the provisions contained in § 668.151;
(4) Score a test answer sheet that it receives from a test administrator;
(5) If a computer-based test, provide the test administrator with software that will:
(i) Immediately generate a score report for each test taker;
(ii) Allow the test administrator to send to the test publisher a secure write-protected diskette copy of the test taker's performance on each test item and the test taker's test scores; and
(iii) Prohibit any changes in test taker responses or test scores.
(6) Promptly send to the student and the institution the student indicated he or she is attending or scheduled to attend a notice stating the student's score for the test and whether or not the student passed the test;
(7) Keep for a period of three years each test answer sheet or electronic record forwarded for scoring and all other documents forwarded by the test administrator with regard to the test;
(8) Three years after the date the Secretary approves the test and for each subsequent three-year period, analyze the test scores of students to determine whether the test scores produce any irregular pattern that raises an inference that the tests were not being properly administered, and provide the Secretary with a copy of this analysis; and
(9) Upon request, give the Secretary, a guaranty agency, or an accrediting agency access to test records or other documents related to an audit, investigation, or program review of the institution, test publisher, or test administrator.
(c)(1) The Secretary may terminate an agreement with a test publisher if the test publisher fails to carry out the terms of the agreement described in paragraph (b) of this section.
(2) Before terminating the agreement, the Secretary gives the test publisher the opportunity to show that it has not failed to carry out the terms of its agreement.
(3) If the Secretary terminates an agreement with a test publisher under this section, the Secretary notifies institutions through publication in the
(a)(1) To establish a student's eligibility for Title IV, HEA program funds under this subpart, if a student has not passed an approved state test, under § 668.143, an institution must select a certified test administrator to give an approved test.
(2) An institution may use the results of an approved test it received from an approved test publisher or assessment center to determine a student's eligibility to receive Title IV, HEA programs funds if the test was independently administered and properly administered.
(b) The Secretary considers that a test is independently administered if the test is—
(1) Given at an assessment center by a test administrator who is an employee of the center; or
(2) Given by a test administrator who—
(i) Has no current or prior financial or ownership interest in the institution, its affiliates, or its parent corporation, other than the interest obtained through its agreement to administer the test, and has no controlling interest in any other educational institution;
(ii) Is not a current or former employee of or consultant to the institution, its affiliates, or its parent corporation, a person in control of another institution, or a member of the family of any of these individuals;
(iii) Is not a current or former member of the board of directors, a current or former employee of or a consultant
(iv) Is not a current or former student of the institution.
(c) The Secretary considers that a test is not independently administered if an institution—
(1) Compromises test security or testing procedures;
(2) Pays a test administrator a bonus, commission, or any other incentive based upon the test scores or pass rates of its students who take the test;
(3) Otherwise interferes with the test administrator's independence or test administration.
(d) The Secretary considers that a test is properly administered if the test administrator—
(1) Is certified by the test publisher to give the publisher's test;
(2) Administers the test in accordance with instructions provided by the test publisher, and in a manner that ensures the integrity and security of the test;
(3) Makes the test available only to a test-taker, and then only during a regularly scheduled test;
(4) Secures the test against disclosure or release;
(5) Submits the completed test to the test publisher within two business days after test administration in accordance with the test publisher's instructions; and
(6) Upon request, gives the Secretary, guaranty agency, licensing agency, accrediting agency, and law enforcement agencies access to test records or other documents related to an audit, investigation, or program review of the institution, or test publisher.
(e) Except as provided in § 668.152, a certified test administrator may not score a test.
(f) A student who fails to pass a test approved under this subpart may not retake the same form of the test for the period prescribed by the test's publisher.
(g) An institution shall maintain a record for each student who took a test under this subpart of—
(1) The test taken by the student;
(2) The date of the test; and
(3) The student's scores as reported by the test publisher, assessment center, or State.
(a)(1) If a test is given by an assessment center, the assessment center shall properly administer the test as described in § 668.151(d).
(2) [Reserved]
(b)(1) Unless an agreement between a test publisher and an assessment center indicates otherwise, an assessment center scores the tests it gives and promptly notifies the institution and the student of the student's score on the test and whether the student passed the test.
(2) If the assessment center scores the test, it must provide annually to the test publisher—
(i) All copies of completed tests; or
(ii) A report listing all test-takers’ scores and institutions to which the scores were sent.
Except as provided in § 668.143—
(a)
(1) If the student is enrolled in a program conducted entirely in his or her native language, the student must take a test approved under §§ 668.146 and 668.148(a)(2), or 668.149(b).
(2) If the student is enrolled in a program that is taught in English with an ESL component, and the student is enrolled in that program and the ESL
(3) If the student is enrolled in a program that is taught in English without an ESL component, or the student does not enroll in the ESL component if the institution offers such a component, the student must take a test in English approved under § 668.146.
(4) If the student enrolls in an ESL program, the student must take an ESL test approved under § 668.148(b); and
(b)
(2) The test must reflect the student's skills and general learned abilities rather than reflect the student's impairment.
(3) The institution shall document that a student is disabled and unable to be evaluated by the use of a conventional test from the list of tests approved by the Secretary.
(4) Documentation of a student's impairment may be satisfied by—
(i) A written determination, including a diagnosis and recommended testing accommodations, by a licensed psychologist or medical physician; or
(ii) A record of such a determination by an elementary or secondary school or a vocational rehabilitation agency, including a diagnosis and recommended testing accommodations.
An institution shall be liable for the Title IV, HEA program funds disbursed to a student whose eligibility is determined under this subpart only if the institution—
(a) Used a test administrator who was not independent of the institution at the time the test was given;
(b) Compromises the testing process in any way; or
(c) Is unable to document that the student received a passing score on an approved test.
(a) Notwithstanding any other provision of this part, an institution may continue to base an eligibility determination under section 484(d) of the HEA for a student on a test that was an approved test as of June 30, 1996, and the passing score on that test, until 60 days after the Secretary publishes in the
(b) If an institution properly based a student's eligibility determination for purposes of section 484(d) of the HEA on a test and passing score that was in effect on June 30, 1996, the institution does not have to redetermine the student's eligibility based upon a test and passing score that was approved under §§ 668.143 through 668.149.
(a)(1) A State that wishes the Secretary to consider its State process as an alternative to achieving a passing score on an approved, independently administered test for the purpose of determining a student's eligibility for Title IV, HEA program funds must apply to the Secretary for approval of that process.
(2) To be an approved State process, the State process does not have to include all the institutions located in that State, but must indicate which institutions are included.
(b) The Secretary approves a State's process if—
(1) The State administering the process can demonstrate that the students it admits under that process without a high school diploma or its equivalent, who enroll in participating institutions have a success rate as determined under paragraph (h) of this section that is within 95 percent of the success rate
(2) The State's process satisfies the requirements contained in paragraphs (c) and (d) of this section.
(c) A State process must require institutions participating in the process to provide each student they admit without a high school diploma or its recognized equivalent with the following services—
(1) Orientation regarding the institution's academic standards and requirements, and student rights;
(2) Assessment of each student's existing capabilities through means other than a single standardized test;
(3) Tutoring in basic verbal and quantitative skills, if appropriate;
(4) Assistance in developing educational goals;
(5) Counseling, including counseling regarding the appropriate class level for that student given the student's individual's capabilities; and
(6) Follow-up by teachers and counselors regarding the student's classroom performance and satisfactory progress toward program completion.
(d) A State process must—
(1) Monitor on an annual basis each participating institution's compliance with the requirements and standards contained in the State's process;
(2) Require corrective action if an institution is found to be in noncompliance with the State process requirements; and
(3) Terminate an institution from the State process if the institution refuses or fails to comply with the State process requirements.
(e)(1) The Secretary responds to a State's request for approval of its State's process within six months after the Secretary's receipt of that request. If the Secretary does not respond by the end of six months, the State's process becomes effective.
(2) An approved State process becomes effective for purposes of determining student eligibility for Title IV, HEA program funds under this subpart six months after the date on which the State submits the process to the Secretary for approval, if the Secretary approves, or does not disapprove, the process during that six month period.
(f) The Secretary approves a State process for a period not to exceed five years.
(g)(1) The Secretary withdraws approval of a State process if the Secretary determines that the State process violated any terms of this section or that the information that the State submitted as a basis for approval of the State process was inaccurate.
(2) The Secretary provides a State with the opportunity to contest a finding that the State process violated any terms of this section or that the information that the State submitted as a basis for approval of the State process was inaccurate.
(h) The State shall calculate the success rates as referenced in paragraph (b) of this section by—
(1) Determining the number of students with high school diplomas who, during the applicable award year described in paragraph (i) of this section, enrolled in participating institutions and—
(i) Successfully completed education or training programs;
(ii) Remained enrolled in education or training programs at the end of that award year; or
(iii) Successfully transferred to and remained enrolled in another institution at the end of that award year;
(2) Determining the number of students with high school diplomas who enrolled in education or training programs in participating institutions during that award year;
(3) Determining the number of students calculated in paragraph (h)(2) of this section who remained enrolled after subtracting the number of students who subsequently withdrew or were expelled from participating institutions and received a 100 percent refund of their tuition under the institutions’ refund policies;
(4) Dividing the number of students determined in paragraph (h)(1) of this section by the number of students determined in paragraph (h)(3) of this section;
(5) Making the calculations described in paragraphs (h)(1) through (h)(4) of this section for students without a high school diploma or its recognized equivalent who enrolled in participating institutions.
(i) For purposes of paragraph (h) of this section, the applicable award year is the latest complete award year for which information is available that immediately precedes the date on which the State requests the Secretary to approve its State process, except that the award year selected must be one of the latest two completed award years preceding that application date.
(a)
(i) Promote sound cash management of title IV, HEA program funds by an institution;
(ii) Minimize the financing costs to the Federal Government of making title IV, HEA program funds available to a student or an institution; and
(iii) Minimize the costs that accrue to a student under a title IV, HEA loan program.
(2) The rules and procedures that apply to an institution under this subpart also apply to a third-party servicer.
(3) As used in this subpart—
(i) The title IV, HEA programs include only the Federal Pell Grant, FSEOG, Federal Perkins Loan, FWS, Direct Loan, and FFEL programs;
(ii) The term “parent” means a parent borrower under the PLUS programs;
(iii) With regard to the FFEL Programs, the term “disburse” means the same as deliver loan proceeds under 34 CFR part 682 of the FFEL Program regulations; and
(iv) A day is a calendar day unless otherwise specified.
(4)
(b)
(a)
(2) Each time an institution requests funds from the Secretary, the institution must identify the amount of funds requested by program and fiscal year designation that the Secretary assigned to the authorization for those funds.
(b)
(1) An institution submits a request for funds to the Secretary. The institution's request for funds may not exceed the amount of funds the institution needs immediately for disbursements the institution has made or will make to eligible students and parents;
(2) If the Secretary accepts that request, the Secretary initiates an electronic funds transfer (EFT) of that amount to a bank account designated by the institution; and
(3) The institution must disburse the funds requested as soon as administratively feasible but no later than three business days following the date the institution received those funds.
(c)
(1) For each student or parent that an institution determines is eligible for title IV, HEA program funds, the institution transmits electronically to the Secretary, within a timeframe established by the Secretary, records that contain program award information for that student or parent. As part of those records, the institution reports the date and amount of the disbursements that it will make or has made to that student or that student's parent;
(2) For each record the Secretary accepts for a student or parent, the Secretary provides by EFT the corresponding disbursement amount to the institution on or before the date reported by the institution for that disbursement;
(3) When the institution receives the funds for each record accepted by the Secretary, the institution may disburse those funds based on its determination at the time the institution transmitted that record to the Secretary that the student is eligible for that disbursement; and
(4) The institution must report any adjustment to a previously accepted record within the time established by the Secretary in a notice published in the
(d)
(1) An institution must first make disbursements to students and parents for the amount of funds those students and parents are eligible to receive under the Federal Pell Grant, Direct Loan, and campus-based programs before the institution may seek reimbursement from the Secretary for those disbursements. The Secretary considers an institution to have made a disbursement if the institution has either credited a student's account or paid a student or parent directly with its own funds;
(2) An institution seeks reimbursement by submitting to the Secretary a request for funds that does not exceed the amount of the actual disbursements the institution has made to students and parents included in that request;
(3) As part of the institution's reimbursement request, the Secretary requires the institution to—
(i) Identify the students for whom reimbursement is sought; and
(ii) Submit to the Secretary or entity approved by the Secretary documentation that shows that each student and parent included in the request was eligible to receive and has received the title IV, HEA program funds for which reimbursement is sought; and
(4) The Secretary approves the amount of the institution's reimbursement request for a student or parent and pays the institution that amount, if the Secretary determines with regard to that student or parent that the institution—
(i) Accurately determined the student's eligibility for title IV, HEA program funds;
(ii) Accurately determined the amount of title IV, HEA program funds paid to the student or parent; and
(iii) Submitted the documentation required under paragraph (d)(3) of this section.
(e)
(1) Submits a request for funds under the provisions of the advance payment ethod described in paragraph (b) of this section, except that the institution's request may not exceed the amount of the actual disbursements the institution made to the students and parents included in that request; or
(2) Seeks reimbursement for those disbursements under the provisions of the reimbursement payment method described in paragraph (d) of this section, except that the Secretary may modify the documentation requirements and review procedures used to approve the reimbursement request.
(a)(1)
(2) For each bank or investment account that includes title IV, HEA program funds, an institution must clearly identify that title IV, HEA program funds are maintained in that account by—
(i) Including in the name of each account the phrase “Federal Funds”; or
(ii)(A) Notifying the bank or investment company of the accounts that contain title IV, HEA program funds and retaining a record of that notice; and
(B) Except for a public institution, filing with the appropriate State or municipal government entity a UCC-1 statement disclosing that the account contains Federal funds and maintaining a copy of that statement.
(b)
(1) The requirements in this subpart;
(2) The recordkeeping and reporting requirements in subpart B of this part; or
(3) Applicable program regulations.
(c)
(2) Except as provided in paragraph (c)(3) of this section, an institution must maintain Direct Loan, Federal Pell Grant, FSEOG, and FWS program funds in an interest-bearing bank account or an investment account as described in paragraph (c)(1) of this section.
(3) An institution does not have to maintain Direct Loan, Federal Pell Grant, FSEOG, and FWS program funds in an interest-bearing bank account or an investment account for an award year if—
(i) The institution drew down less than a total of $3 million of those funds in the prior award year and anticipates that it will not draw down more than that amount in the current award year;
(ii) The institution demonstrates by its cash management practices that it will not earn over $250 on those funds during the award year; or
(iii) The institution requests those funds from the Secretary under the just-in-time payment method.
(4) If an institution maintains Direct Loan, Federal Pell Grant, FSEOG, and FWS program funds in an interest-bearing or investment account, the institution may keep the initial $250 it earns on those funds during an award year. By June 30 of that award year, the institution must remit to the Secretary any earnings over $250.
(d)
(i) Identify the cash balance of the funds of each title IV, HEA program that are included in the institution's bank or investment account as readily as if those program funds were maintained in a separate account; and
(ii) Identify the earnings on title IV, HEA program funds maintained in the institution's bank or investment account.
(2) An institution must maintain its financial records in accordance with the provisions under § 668.24.
(e)
(a)
(i) Funds received from the Secretary;
(ii) Funds received from a lender under the FFEL Programs; or
(iii) Institutional funds used in advance of receiving title IV, HEA program funds.
(2) If, earlier than 10 days before the first day of classes of a payment period, or for a student subject to the requirements of § 682.604(c)(5) or § 685.303(b)(4) earlier than 30 days after the first day of the payment period, an institution credits a student's institutional account with institutional funds in advance of receiving title IV, HEA program funds, the Secretary considers that the institution makes that disbursement on the 10th day before the first day of classes, or the 30th day after the beginning of the payment period for a student subject to the requirements of § 682.604(c)(5) or § 685.303(b)(4).
(b)
(2) The provisions of paragraph (b)(1) of this section do not apply to the disbursement of FWS Program funds.
(3) For a student enrolled in an eligible program at an institution that measures academic progress in clock hours, in determining whether the student completes the clock hours in a payment period, an institution may include clock hours for which the student has an excused absence if—
(i) The institution has a written policy that permits excused absences; and
(ii) The number of excused absences under the written policy for purposes of this paragraph does not exceed the lesser of—
(A) The policy on excused absences of the institution's accrediting agency or, if the institution has more than one accrediting agency, the agency designated under 34 CFR part 600.11(b);
(B) The policy on excused absences of any State agency that licenses the institution or otherwise legally authorizes the institution to operate in the State; or
(C) Ten percent of the clock hours in the payment period.
(4) For purposes of paragraph (b)(3) of this section, an “excused absence” is an absence that a student does not have to make up.
(c)
(1) Releasing to the student or parent a check provided by a lender to the institution under an FFEL Program;
(2) Issuing a check or other instrument payable to and requiring the endorsement or certification of the student or parent. An institution issues a check by—
(i) Releasing or mailing the check to a student or parent; or
(ii) Notifying the student or parent that the check is available for immediate pickup;
(3) Initiating an electronic funds transfer (EFT) to a bank account designated by the student or parent; or
(4) Dispensing cash for which an institution obtains a signed receipt from the student or parent.
(d)
(i) Tuition and fees;
(ii) Board, if the student contracts with the institution for board; and
(iii) Room, if the student contracts with the institution for room.
(2) After obtaining the appropriate authorization from a student or parent
(i) Current charges that are in addition to the charges described in paragraph (d)(1) of this section that were incurred by the student at the institution for educationally related activities; and
(ii) Minor prior award year charges if these charges are less than $100 or if the payment of these charges does not, and will not, prevent the student from paying his or her current educational costs.
(3) If an institution disburses Direct Loan Program funds by crediting a student's account at the institution, the institution must first credit the student's account with those funds to pay for outstanding current and authorized charges.
(4) For purposes of this paragraph, current charges refers to charges assessed the student by the institution for—
(i) The current award year; or
(ii) The loan period for which an institution certified or originated a loan under the FFEL or Direct Loan programs.
(e)
(1) No later than 14 days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or
(2) No later than 14 days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period.
(f)
(1) If a student is enrolled in a credit-hour educational program that is offered in semester, trimester, or quarter academic terms, the earliest an institution may disburse title IV, HEA program funds to a student or parent for any payment period is 10 days before the first day of classes for a payment period.
(2) If a student is enrolled in a credit-hour educational program that is not offered in semester, trimester, or quarter academic terms, or in a clock hour educational program the earliest an institution may disburse title IV, HEA program funds to a student or parent for any payment period is the later of—
(i) Ten days before the first day of classes of the payment period; or
(ii) The date the student completed the previous payment period for which he or she received title IV, HEA program funds, except that this provision does not apply to the payment of Direct Loan or FFEL program funds under the conditions described in 34 CFR 685.301 (b)(3)(ii), (b)(5), and (b)(6) and 34 CFR 682.604 (c)(6)(ii), (c)(7), and (c)(8), respectively.
(3) The earliest an institution may disburse the initial installment of a loan under the Direct Loan or FFEL programs to a first-year, first-time borrower as described in 34 CFR 682.604(c) and 34 CFR 685.303(b)(4) is 30 days after the first day of the student's program of study.
(g)
(i) For a loan under the FFEL and Direct Loan programs, the student is no longer enrolled at the institution as at least a half-time student for the period of enrollment for which the loan was intended; or
(ii) For an award under the Federal Pell Grant, FSEOG, and Federal Perkins Loan programs, the student is no longer enrolled at the institution for the award year.
(2)
(i) Except in the case of a PLUS loan, the Secretary processed a SAR or ISIR with an official expected family contribution; and
(ii) (A) For a loan under the FFEL or Direct Loan programs, the institution certified or originated the loan; or
(B) For an award under the Federal Perkins Loan or FSEOG programs, the institution made that award to the student.
(3)
(i) If the student withdrew from the institution during a payment period or period of enrollment, the institution must make any post-withdrawal disbursement required under § 668.22(a)(3) in accordance with the provisions of § 668.22(a)(4);
(ii) If the student successfully completed the payment period or period of enrollment, the institution must provide the student (or parent) the opportunity to receive the amount of title IV, HEA program funds that the student (or parent) was eligible to receive while the student was enrolled at the institution. For a late disbursement in this circumstance, the institution may credit the student's account to pay for current and allowable charges as described in paragraph (d) of this section, but must pay or offer any remaining amount to the student or parent; or
(iii) If the student did not withdraw but ceased to be enrolled as at least a half-time student, the institution may make the late disbursement of a loan under the FFEL or Direct Loan programs to pay for educational costs that the institution determines the student incurred for the period in which the student was eligible.
(4)
(ii) An institution may not make a second or subsequent late disbursement of a loan under the FFEL or Direct Loan programs unless the student successfully completed the period of enrollment for which the loan was intended.
(iii) An institution may not make a late disbursement of a loan under the FFEL or Direct Loan programs if the student was a first-year, first-time borrower unless the student completed the first 30 days of his or her program of study. This limitation does not apply if the institution is exempt from the 30-day delayed disbursement requirements under § 682.604(c)(5)(i), (ii), or (iii) or § 685.303(b)(4)(i)(A), (B), or (C) of this chapter.
(iv) An institution may not make a late disbursement of a Federal Pell Grant unless it received a valid SAR or a valid ISIR for the student by the deadline date established by the Secretary in a notice published in the
(a)
(2) If an institution credits a student's account at the institution with Direct Loan, FFEL, or Federal Perkins Loan Program funds, the institution must notify the student, or parent of—
(i) The date and amount of the disbursement;
(ii) The student's right, or parent's right to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan. However, the institution
(iii) The procedures and the time by which the student or parent must notify the institution that he or she wishes to cancel the loan or loan disbursement.
(3) The institution must send the notice described in paragraph (a)(2) of this section in writing no earlier than 30 days before, and no later than 30 days after, crediting the student's account at the institution.
(4)(i) A student or parent must inform the institution if he or she wishes to cancel all or a portion of a loan or loan disbursement.
(ii) The institution must return the loan proceeds, cancel the loan, or do both, in accordance with applicable program regulations if the institution receives a loan cancellation request either—
(A) Within 14 days after the date the institution sends the notice described in paragraph (a)(2) of this section; or
(B) If the institution sends the notice described in paragraph (a)(2) of this section more than 14 days prior to the first day of the payment period, by the first day of the payment period.
(iii) If a student or parent requests a loan cancellation after the period set forth in paragraph (a)(4)(ii) of this section, the institution may return the loan proceeds, cancel the loan, or do both, in accordance with applicable program regulations.
(5) An institution must inform a student or parent in writing or electronically regarding the outcome of any cancellation request.
(b)
(i) Disburse title IV, HEA program funds to a bank account designated by the student or parent;
(ii) Use the student's or parent's title IV, HEA program funds to pay for charges described in § 668.164(d)(2) that are included in that authorization; and
(iii) Except if prohibited by the Secretary under the reimbursement method, hold on behalf of the student or parent any title IV, HEA program funds that would otherwise be paid directly to the student or parent under § 668.164(e).
(2) In obtaining the student's or parent's authorization to perform an activity described in paragraph (b)(1) of this section, an institution—
(i) May not require or coerce the student or parent to provide that authorization;
(ii) Must allow the student or parent to cancel or modify that authorization at any time; and
(iii) Must clearly explain how it will carry out that activity.
(3) A student or parent may authorize an institution to carry out the activities described in paragraph (b)(1) of this section for the period during which the student is enrolled at the institution.
(4)(i) If a student or parent modifies an authorization, the modification takes effect on the date the institution receives the modification notice.
(ii) If a student or parent cancels an authorization to use title IV, HEA program funds to pay for authorized charges under § 668.164(d)(2), the institution may use title IV, HEA program funds to pay only those authorized charges incurred by the student before the institution received the notice.
(iii) If a student or parent cancels an authorization to hold title IV, HEA program funds under paragraph (b)(1)(iii) of this section, the institution must pay those funds directly to the student or parent as soon as possible but no later than 14 days after the institution receives that notice.
(5) If an institution holds excess student funds under paragraph (b)(1)(iii) of this section, the institution must—
(i) Identify the amount of funds the institution holds for each student or parent in a subsidiary ledger account designed for that purpose;
(ii) Maintain, at all times, cash in its bank account in an amount at least equal to the amount of funds the institution holds for the student; and
(iii) Notwithstanding any authorization obtained by the institution under this paragraph, pay any remaining balance on loan funds by the end of the loan period and any remaining other title IV, HEA program funds by the end
(a)
(2) The provisions in this section do not apply to the title IV, HEA program funds that an institution receives from the Secretary under the just-in-time payment method.
(b)
(i) In the award year preceding that drawdown, the amount of that excess cash balance is less than—
(A) For a period of peak enrollment at the institution during which that drawdown occurs, three percent of its total prior-year drawdowns; or
(B) For any other period, one percent of its total prior-year drawdowns; and
(ii) Within the next seven days, the institution eliminates its excess cash balance by disbursing title IV, HEA program funds to students or parents for at least the amount of that balance.
(2) For the purposes of this section, a period of peak enrollment at an institution occurs when at least 25 percent of the institution's students start classes during a given 30-day period. For any award year, an institution calculates the percentage of students who started classes during a given 30-day period by—
(i) For the prior award year in which the 30-day period began, determining the number of students who started classes during that period;
(ii) Determining the total number of students who started classes during the entire award year used in paragraph (b)(2)(i) of this section;
(iii) Dividing the number of students in paragraph (b)(2)(i) of this section by the number of students in paragraph (b)(2)(ii) of this section; and
(iv) Multiplying the result obtained in paragraph (b)(2)(iii) of this section by 100.
(3) For the purpose of determining the total amount of title IV, HEA program funds under paragraph (b)(1)(i) of this section, an institution that participates in the Direct Loan Program may include, for the latest year for which the Secretary has complete data, the total amount of loans guaranteed under the FFEL Program for students attending the institution during that year.
(c)
(i) As provided in paragraph (c)(2) of this section, requires the institution to reimburse the Secretary for the costs the Secretary deems to have incurred in making those excess funds available to the institution; and
(ii) May initiate a proceeding to fine, limit, suspend, or terminate the institution's participation in one or more title IV, HEA programs under subpart G of this part.
(2) For the purposes of this section, upon a finding that an institution has maintained excess cash, the Secretary—
(i) Considers the institution to have issued a check on the date that the check cleared the institution's bank account, unless the institution demonstrates to the satisfaction of the Secretary that it issued the check shortly after the institution wrote the check; and
(ii) Calculates, or requires the institution to calculate, a liability for
(a)
(1) An institution may not request a lender to provide it with loan funds by EFT or master check earlier than—
(i) Twenty-seven days after the first day of classes of the first payment period for a first-year, first-time Federal Stafford Loan Program borrower as defined in § 682.604(c)(5); or
(ii) Thirteen days before the first day of classes for any subsequent payment period for a first-year, first-time Federal Stafford Loan Program borrower or for any payment period for all other Federal Stafford Loan Program borrowers; and
(2) An institution may not request a lender to provide it with loan funds by check requiring the endorsement of the borrower earlier than—
(i) The first day of classes of the first payment period for a first-year, first-time Federal Stafford Loan Program borrower as defined in § 682.604(c)(5); or
(ii) Thirty days before the first day of classes for any subsequent payment period for a first-year, first-time Federal Stafford Loan Program borrower or for any payment period for all other Federal Stafford borrowers; and
(3)(i) An institution may not request a lender to provide it with loan funds by EFT or master check for any Federal PLUS Program loan earlier than 13 days before the first day of classes for any payment period.
(ii) An institution may not request a lender to provide with loan funds by check requiring the endorsement of the borrower for any Federal PLUS Program loan earlier than 30 days before the first day of classes for any payment period.
(b)
(i) Ten business days following the date the institution receives the funds if the lender provides those funds to the institution by EFT or master check on or after July 1, 1997 but before July 1, 1999;
(ii) Three business days following the date the institution receives the funds if the lender provides those funds to the institution by EFT and master check on or after July 1, 1999; or
(iii) Thirty days after the institution receives the funds if a lender provides those funds by a check payable to the borrower or copayable to the borrower and the institution.
(2) If the institution does not disburse the loan funds as specified in paragraph (b)(1) or (c) of this section, the institution must return those funds to the lender promptly but no later than 10 business days after the date the institution is required to disburse the funds.
(3) If an institution must return loan funds to the lender under paragraph (b)(2) of this section and the institution determines that the student is eligible to receive the loan funds, the school may disburse the funds to the student or parent rather than return them to the lender provided the funds are disbursed prior to the end of the applicable timeframe under paragraph (b)(2) of this section.
(c)
(1) Ten business days after the date set forth in paragraph (b)(1) of this section if—
(i)(A) The institution does not disburse FFEL Program funds to a borrower because the student did not complete the required number of clock or credit hours in a preceding payment period; and
(B) The institution expects the student to complete required hours within this 10-day period; or
(ii)(A) The student has not met all the FFEL Programs eligibility requirements; and
(B) The institution expects the student to meet those requirements within this 10-day period; or
(2) Thirty days after the date set forth in paragraph (b) of this section for funds a lender provides by EFT or master check if the Secretary places the institution on the reimbursement payment method under paragraph (d) or (e) of this section.
(d)
(i) May not disburse FFEL Program funds to a borrower until the Secretary approves a request from the institution to make that disbursement for that borrower; and
(ii) If prohibited by the Secretary, may not certify a borrower's loan application until the Secretary approves a request from the institution to make that certification for that borrower.
(2) In order for the Secretary to approve a disbursement or certification request from the institution, the institution must submit documentation to the Secretary or entity approved by the Secretary that shows that each borrower included in that request whose loan has not been disbursed or certified is eligible to receive that disbursement or certification.
(3) Pending the Secretary's approval of a disbursement or certification request, the Secretary may—
(i) Prohibit the institution from endorsing a master check or obtaining a borrower's endorsement of any loan check the institution receives from a lender;
(ii) Require the institution to maintain loan funds that it receives from a lender via EFT in a separate bank account that meets the requirements under § 668.164; and
(iii) Prohibit the institution from certifying a borrower's loan application.
(e)
(f)
(a)
(1) Provide the services described in its official publications and statements;
(2) Administer properly the title IV, HEA programs in which it participates; and
(3) Meet all of its financial obligations.
(b)
(1) The institution's Equity, Primary Reserve, and Net Income ratios yield a composite score of at least 1.5, as provided under § 668.172 and appendices A and B to this subpart;
(2) The institution has sufficient cash reserves to make required returns of unearned title IV HEA program funds, as provided under § 668.173;
(3) The institution is current in its debt payments. An institution is not current in its debt payments if—
(i) It is in violation of any existing loan agreement at its fiscal year end, as disclosed in a note to its audited financial statements or audit opinion; or
(ii) It fails to make a payment in accordance with existing debt obligations for more than 120 days, and at least one creditor has filed suit to recover funds under those obligations; and
(4) The institution is meeting all of its financial obligations, including but not limited to—
(i) Refunds that it is required to make under its refund policy, including the return of title IV, HEA program funds for which it is responsible under § 668.22; and
(ii) Repayments to the Secretary for debts and liabilities arising from the institution's participation in the title IV, HEA programs.
(c)
(1)(i) Notifies the Secretary that it is designated as a public institution by the State, local or municipal government entity, tribal authority, or other government entity that has the legal authority to make that designation; and
(ii) Provides a letter from an official of that State or other government entity confirming that the institution is a public institution; and
(2) Is not in violation of any past performance requirement under § 668.174.
(d)
(1) In the institution's audited financial statements, the opinion expressed by the auditor was an adverse, qualified, or disclaimed opinion, or the auditor expressed doubt about the continued existence of the institution as a going concern, unless the Secretary determines that a qualified or disclaimed opinion does not have a significant bearing on the institution's financial condition; or
(2) As provided under the past performance provisions in § 668.174 (a) and (b)(1), the institution violated a title IV, HEA program requirement, or the persons or entities affiliated with the institution owe a liability for a violation of a title IV, HEA program requirement.
(e)
(1) Initiate an action under subpart G of this part to fine the institution, or limit, suspend, or terminate the institution's participation in the title IV, HEA programs; or
(2) For an institution that is provisionally certified, take an action
(a)
(1) Calculating the result of its Primary Reserve, Equity, and Net Income ratios, as described under paragraph (b) of this section;
(2) Calculating the strength factor score for each of those ratios by using the corresponding algorithm;
(3) Calculating the weighted score for each ratio by multiplying the strength factor score by its corresponding weighting percentage;
(4) Summing the resulting weighted scores to arrive at the composite score; and
(5) Rounding the composite score to one digit after the decimal point.
(b)
(1) The ratios for proprietary institutions are:
For proprietary institutions:
(2) The ratios for private non-profit institutions are:
(c)
(1) Generally excludes extraordinary gains or losses, income or losses from discontinued operations, prior period adjustments, the cumulative effect of changes in accounting principles, and the effect of changes in accounting estimates;
(2) May include or exclude the effects of questionable accounting treatments, such as excessive capitalization of marketing costs;
(3) Excludes all unsecured or uncollateralized related-party receivables;
(4) Excludes all intangible assets defined as intangible in accordance with generally accepted accounting principles; and
(5) Excludes from the ratio calculations Federal funds provided to an institution by the Secretary under program authorized by the HEA only if—
(i) In the notes to the institution's audited financial statement, or as a separate attestation, the auditor discloses by name and CFDA number, the amount of HEA program funds reported as expenses in the Statement of Activities for the fiscal year covered by that audit or attestation; and
(ii) The institution's composite score, as determined by the Secretary, is less than 1.5 before the reported expenses arising from those HEA funds are excluded from the ratio calculations.
(a)
(1) Satisfies the requirements for a public institution under § 668.171(c)(1);
(2) Is located in a State that has a tuition recovery fund approved by the Secretary and the institution contributes to that fund; or
(3) Returns, in a timely manner as described in paragraph (b) of this section, unearned title IV, HEA program funds that it is responsible for returning under the provisions of § 668.22 for a student that withdrew from the institution.
(b)
(1) The institution deposits or transfers the funds into the bank account it maintains under § 668.163 no later than 30 days after the date it determines that the student withdrew;
(2) The institution initiates an electronic funds transfer (EFT) no later than 30 days after the date it determines that the student withdrew;
(3) The institution initiates an electronic transaction, no later than 30 days after the date it determines that the student withdrew, that informs an FFEL lender to adjust the borrower's loan account for the amount returned; or
(4) The institution issues a check no later than 30 days after the date it determines that the student withdrew. However, the Secretary considers that the institution did not satisfy this requirement if—
(i) The institution's records show that the check was issued more than 30 days after the date the institution determined that the student withdrew; or
(ii) The date on the cancelled check shows that the bank used by the Secretary or FFEL Program lender endorsed that check more than 45 days after the date the institution determined that the student withdrew.
(c)
(i) In the sample of student records audited or reviewed that the institution did not return unearned title IV, HEA program funds within the timeframes described in paragraph (b) of this section for 5% or more of the students in the sample. (For purposes of determining this percentage, the sample includes only students for whom the institution was required to return unearned funds during its most recently completed fiscal year.); or
(ii) A material weakness or reportable condition in the institution's report on internal controls relating to the return of unearned title IV, HEA program funds.
(2) The Secretary does not consider an institution to be out of compliance with the reserve standard under § 668.173(a)(3) if the institution is cited
(d)
(2) The amount of the letter of credit required under paragraph (d)(1) of this section is 25 percent of the total amount of unearned title IV, HEA program funds that the institution was required to return under § 668.22 during the institution's most recently completed fiscal year.
(3) An institution that is subject to paragraph (d)(1) of this section must submit to the Secretary a letter of credit no later than 30 days after the earlier of the date that—
(i) The institution is required to submit its compliance audit;
(ii) The Office of the Inspector General issues a final audit report;
(iii) The designated department official issues a final program review determination;
(iv) The Department issues a preliminary program review report or draft audit report, or a guaranty agency issues a preliminary report showing that the institution did not return unearned funds for more than 10% of the sampled students; or
(v) The Secretary sends a written notice to the institution requesting the letter of credit that explains why the institution has failed to return unearned funds in a timely manner.
(e)
(1) An institution does not have to submit the letter of credit if the amount calculated under paragraph (d)(2) of this section is less than $5,000 and the institution can demonstrate that it has cash reserves of at least $5,000 available at all times.
(2) An institution may delay submitting the letter of credit and request the Secretary to reconsider a finding made in its most recent audit or review report that it failed to return unearned title IV, HEA program funds in a timely manner if—
(i)(A) The institution submits documents showing that the unearned title IV, HEA program funds were not returned in a timely manner solely because of exceptional circumstances beyond the institution's control and that the institution would not have exceeded the compliance thresholds under paragraph (c)(1) of this section had it not been for these exceptional circumstances; or
(B) The institution submits documents showing that it did not fail to make timely refunds as provided under paragraphs (b) and (c) of this section; and
(ii) The institution's request, along with the documents described in paragraph (e)(2)(i) of this section, is submitted to the Secretary no later than the date it would otherwise be required to submit a letter of credit under paragraph (d)(3).
(3) If the Secretary denies the institution's request under paragraph (e)(2) of this section, the Secretary notifies the institution of the date it must submit the letter of credit.
(f)
(1) Provides refunds to both in-State and out-of-State students;
(2) Allocates all refunds in accordance with the order required under § 668.22; and
(3) Provides a reliable mechanism for the State to replenish the fund should any claims arise that deplete the fund's assets.
(a)
(1) Has been limited, suspended, terminated, or entered into a settlement agreement to resolve a limitation, suspension, or termination action initiated by the Secretary or a guaranty agency, as defined in 34 CFR part 682, within the preceding five years;
(2) In either of its two most recent compliance audits had an audit finding, or in a report issued by the Secretary had a program review finding for its current fiscal year or either of its preceding two fiscal years, that resulted in the institution's being required to repay an amount greater than 5 percent of the funds that the institution received under the title IV, HEA programs during the year covered by that audit or program review;
(3) Has been cited during the preceding five years for failure to submit in a timely fashion acceptable compliance and financial statement audits required under this part, or acceptable audit reports required under the individual title IV, HEA program regulations; or
(4) Has failed to resolve satisfactorily any compliance problems identified in audit or program review reports based upon a final decision of the Secretary issued pursuant to subpart G or H of this part.
(b)
(A) Exercises or exercised substantial control over another institution or a third-party servicer that owes a liability for a violation of a title IV, HEA program requirement; or
(B) Owes a liability for a violation of a title IV, HEA program requirement; and
(ii) That person, family member, institution, or servicer does not demonstrate that the liability is being repaid in accordance with an agreement with the Secretary.
(2) The Secretary may determine that an institution is financially responsible, even if the institution is not otherwise financially responsible under paragraph (b)(1) of this section, if—
(i) The institution notifies the Secretary, within the time permitted and in the manner provided under 34 CFR 600.30, that the person referenced in paragraph (b)(1) of this section exercises substantial control over the institution; and
(ii) The person referenced in paragraph (b)(1) of this section repaid to the Secretary a portion of the applicable liability, and the portion repaid equals or exceeds the greater of—
(A) The total percentage of the ownership interest held in the institution or third-party servicer that owes the liability by that person or any member or members of that person's family, either alone or in combination with one another;
(B) The total percentage of the ownership interest held in the institution or servicer that owes the liability that the person or any member or members of the person's family, either alone or in combination with one another, represents or represented under a voting trust, power of attorney, proxy, or similar agreement; or
(C) Twenty-five percent, if the person or any member of the person's family is or was a member of the board of directors, chief executive officer, or other executive officer of the institution or servicer that owes the liability, or of an entity holding at least a 25 percent ownership interest in the institution that owes the liability; or
(iii) The applicable liability described in paragraph (b)(1) of this section is currently being repaid in accordance with a written agreement with the Secretary; or
(iv) The institution demonstrates to the satisfaction of the Secretary why—
(A) The person who exercises substantial control over the institution should nevertheless be considered to lack that control; or
(B) The person who exercises substantial control over the institution
(c)
(i) An interest as tenant in common, joint tenant, or tenant by the entireties;
(ii) A partnership; and
(iii) An interest in a trust.
(2) The term “ownership interest” does not include any share of the ownership or control of, or any right to share in the proceeds of the operation of a profit-sharing plan, provided that all employees are covered by the plan.
(3) The Secretary generally considers a person to exercise substantial control over an institution or third-party servicer if the person—
(i) Directly or indirectly holds at least a 25 percent ownership interest in the institution or servicer;
(ii) Holds, together with other members of his or her family, at least a 25 percent ownership interest in the institution or servicer;
(iii) Represents, either alone or together with other persons under a voting trust, power of attorney, proxy, or similar agreement, one or more persons who hold, either individually or in combination with the other persons represented or the person representing them, at least a 25 percent ownership in the institution or servicer; or
(iv) Is a member of the board of directors, a general partner, the chief executive officer, or other executive officer of—
(A) The institution or servicer; or
(B) An entity that holds at least a 25 percent ownership interest in the institution or servicer.
(4) “Family member” is defined in § 600.21(f) of this chapter.
(a)
(b)
(c)
(d)
(B) An institution continues to qualify under this alternative if, based on the institution's audited financial statement for each of its subsequent two fiscal years, the Secretary determines that the institution's composite score is in the range from 1.0 to 1.4.
(ii) An institution that qualified under this alternative for three consecutive years or for one of those years, may not seek to qualify again under this alternative until the year after the institution achieves a composite score of at least 1.5, as determined by the Secretary.
(2) Under this zone alternative, the Secretary—
(i) Requires the institution to make disbursements to eligible students and parents under either the cash monitoring or reimbursement payment method described in § 668.162;
(ii) Requires the institution to provide timely information regarding any of the following oversight and financial events—
(A) Any adverse action, including a probation or similar action, taken against the institution by its accrediting agency;
(B) Any event that causes the institution, or related entity as defined in the Statement of Financial Accounting Standards (SFAS) 57, to realize any liability that was noted as a contingent liability in the institution's or related entity's most recent audited financial statement;
(C) Any violation by the institution of any loan agreement;
(D) Any failure of the institution to make a payment in accordance with its debt obligations that results in a creditor filing suit to recover funds under those obligations;
(E) Any withdrawal of owner's equity from the institution by any means, including by declaring a dividend; or
(F) Any extraordinary losses, as defined in accordance with Accounting Principles Board (APB) Opinion No. 30.
(iii) May require the institution to submit its financial statement and compliance audits earlier than the time specified under § 668.23(a)(4); and
(iv) May require the institution to provide information about its current operations and future plans.
(3) Under the zone alternative, the institution must—
(i) For any oversight or financial event described under paragraph (d)(2)(ii) of this section for which the institution is required to provide information, provide that information to the Secretary by certified mail or electronic or facsimile transmission no later than 10 days after that event occurs. An institution that provides this information electronically or by facsimile transmission is responsible for confirming that the Secretary received a complete and legible copy of that transmission; and
(ii) As part of its compliance audit, require its auditor to express an opinion on the institution's compliance with the requirements under the zone alternative, including the institution's administration of the payment method under which the institution received and disbursed title IV, HEA program funds.
(4) If an institution fails to comply with the requirements under paragraphs (d) (2) or (3) of this section, the Secretary may determine that the institution no longer qualifies under this alternative.
(e)
(f)
(i) The institution is not financially responsible because it does not satisfy the general standards under § 668.171(b) or because of an audit opinion described under § 668.171(d); or
(ii) The institution is not financially responsible because of a condition of past performance, as provided under § 668.174(a), and the institution demonstrates to the Secretary that it has satisfied or resolved that condition.
(2) Under this alternative, the institution must—
(i) Submit to the Secretary an irrevocable letter of credit that is acceptable and payable to the Secretary, for an amount determined by the Secretary that is not less than 10 percent of the title IV, HEA program funds received by the institution during its most recently completed fiscal year, except that this requirement does not apply to a public institution;
(ii) Demonstrate that it was current on its debt payments and has met all of its financial obligations, as required under § 668.171 (b)(3) and (b)(4), for its two most recent fiscal years; and
(iii) Comply with the provisions under the zone alternative, as provided under paragraph (d) (2) and (3) of this section.
(3) If at the end of the period for which the Secretary provisionally certified the institution, the institution is still not financially responsible, the Secretary may again permit the institution to participate under a provisional certification, but the Secretary—
(i) May require the institution, or one or more persons or entities that exercise substantial control over the institution, as determined under § 668.174(b)(1) and (c), or both, to submit to the Secretary financial guarantees for an amount determined by the Secretary to be sufficient to satisfy any potential liabilities that may arise from the institution's participation in the title IV, HEA programs; and
(ii) May require one or more of the persons or entities that exercise substantial control over the institution, as determined under § 668.174(b)(1) and (c), to be jointly or severally liable for any liabilities that may arise from the institution's participation in the title IV, HEA programs.
(g)
(i)(A) The persons or entities that exercise substantial control, as determined under § 668.174(b)(1) and (c), repay or enter into an agreement with the Secretary to repay the applicable portion of that liability, as provided under § 668.174(b)(2)(ii); or
(B) The institution assumes that liability, and repays or enters into an agreement with the Secretary to repay that liability;
(ii) The institution satisfies the general standards and provisions of financial responsibility under § 668.171(b) and (d)(1), except that institution must demonstrate that it was current on its debt payments and has met all of its financial obligations, as required under § 668.171 (b)(3) and (b)(4), for its two most recent fiscal years; and
(iii) The institution submits to the Secretary an irrevocable letter of credit that is acceptable and payable to the Secretary, for an amount determined by the Secretary that is not less than 10 percent of the title IV, HEA program funds received by the institution during its most recently completed fiscal year.
(2) Under this alternative, the Secretary—
(i) Requires the institution to comply with the provisions under the zone alternative, as provided under paragraph (d) (2) and (3) of this section;
(ii) May require the institution, or one or more persons or entities that exercise substantial control over the institution, or both, to submit to the Secretary financial guarantees for an
(iii) May require one or more of the persons or entities that exercise substantial control over the institution to be jointly or severally liable for any liabilities that may arise from the institution's participation in the title IV, HEA programs.
Your cohort default rate is a measure we use to determine your eligibility to participate in various Title IV, HEA programs. We may also use it for determining your eligibility for exemptions, such as those for certain disbursement requirements under the FFEL and Direct Loan Programs. This subpart describes how cohort default rates are calculated, some of the consequences of cohort default rates, and how you may request changes to your cohort default rates or appeal their consequences. Under this subpart, you submit a “challenge” after you receive your draft cohort default rate, and you request an “adjustment” or “appeal” after your official cohort default rate is published.
We use the following definitions in this subpart:
(a)
(b)
(2) For FFELP loans that we hold, we are the data manager.
(3) For Direct Loan Program loans, the Direct Loan Servicer, as defined in 34 CFR 685.102, is the data manager.
(c)
(d)
(e)
(f)
(2) A Federal SLS loan is considered to enter repayment—
(i) At the same time the borrower's Federal Stafford loan enters repayment, if the borrower received the Federal SLS loan and the Federal Stafford loan during the same period of continuous enrollment; or
(ii) In all other cases, on the day after the student ceases to be enrolled at an institution on at least a half-time basis in an educational program leading to a degree, certificate, or other recognized educational credential.
(3) For the purposes of this subpart, a loan is considered to enter repayment on the date that a borrower repays it in full, if the loan is paid in full before the loan enters repayment under paragraphs (f)(1) or (f)(2) of this section.
(g)
(h)
(i)
(j)
(k)
(a)
(1) First, under paragraph (b) of this section, we identify the borrowers in your cohort for the fiscal year. If the total number of borrowers in that cohort is fewer than 30, we also identify the borrowers in your cohorts for the 2 most recent prior fiscal years.
(2) Second, under paragraph (c) of this section, we identify the borrowers in the cohort (or cohorts) who are considered to be in default. If more than one cohort will be used to calculate your cohort default rate, we identify defaulted borrowers separately for each cohort.
(3) Third, under paragraph (d) of this section, we calculate your cohort default rate.
(4) Fourth, we apply your cohort default rate to all of your locations—
(i) As you exist on the date you receive the notice of your official cohort default rate; and
(ii) From the date on which you receive the notice of your official cohort default rate until you receive our notice that the cohort default rate no longer applies.
(b)
(2) A borrower may be included in more than one of your cohorts and may be included in the cohorts of more than one institution in the same fiscal year.
(c)
(i) Before the end of the following fiscal year, the borrower defaults on any FFELP loan that was used to include the borrower in the cohort or on any Federal Consolidation Loan Program loan that repaid a loan that was used to include the borrower in the cohort (however, a borrower is not considered to be in default unless a claim for insurance has been paid on the loan by a guaranty agency or by us);
(ii) Before the end of the following fiscal year, the borrower fails to make an installment payment, when due, on any Direct Loan Program loan that was used to include the borrower in the cohort or on any Federal Direct Consolidation Loan Program loan that repaid a loan that was used to include the borrower in the cohort, and the borrower's failure persists for 360 days (or for 270 days, if the borrower's first day of delinquency was before October 7, 1998); or
(iii) Before the end of the following fiscal year, you or your owner, agent, contractor, employee, or any other affiliated entity or individual make a payment to prevent a borrower's default on a loan that is used to include the borrower in that cohort.
(2) A borrower is not considered to be in default based on a loan that is, before the end of the fiscal year immediately following the fiscal year in which it entered repayment—
(i) Rehabilitated under 34 CFR 682.405 or 34 CFR 685.211(e); or
(ii) Repurchased by a lender because the claim for insurance was submitted or paid in error.
(d)
(1) Thirty or more borrowers in your cohort for a fiscal year, your cohort default rate is the percentage that is derived by dividing—
(i) The number of borrowers in the cohort who are in default, as determined under paragraph (c) of this section; by
(ii) The number of borrowers in the cohort, as determined under paragraph (b) of this section.
(2) Fewer than 30 borrowers in your cohort for a fiscal year, your cohort default rate is the percentage that is derived by dividing—
(i) The total number of borrowers in that cohort and in the two most recent prior cohorts who are in default, as determined for each cohort under paragraph (c) of this section; by
(ii) The total number of borrowers in that cohort and the two most recent
(a)
(2) In determining cohort default rates under this section, the date of a merger, acquisition, or other change in status is the date the change occurs.
(3) A change in status may affect your eligibility to participate in Title IV, HEA programs under § 668.187 or § 668.188.
(4) If another institution's cohort default rate is applicable to you under this section, you may challenge, request an adjustment, or submit an appeal for the cohort default rate under the same requirements that would be applicable to the other institution under §§ 668.185 and 668.189.
(b)
(1) For the cohort default rates published before the date of the acquisition or merger, your cohort default rates are the same as those of your predecessor that had the highest total number of borrowers entering repayment in the two most recent cohorts used to calculate those cohort default rates; and
(2) Beginning with the first cohort default rate published after the date of the acquisition or merger, your cohort default rates are determined by including the applicable borrowers from each institution involved in the acquisition or merger in the calculation under § 668.183.
(c)
(1) The cohort default rates published for you before the date of the change apply to you and to the newly acquired branch or location;
(2) Beginning with the first cohort default rate published after the date of the change, your cohort default rates for the next 3 fiscal years are determined by including the applicable borrowers from your institution and the other institution (including all of its locations) in the calculation under § 668.183;
(3) After the period described in paragraph (c)(2) of this section, your cohort default rates do not include borrowers from the other institution in the calculation under § 668.183; and
(4) At all times, the cohort default rate for the institution from which you acquired the branch or location is not affected by this change in status.
(d)
(1) The cohort default rates published before the date of the change for your former parent institution are also applicable to you;
(2) Beginning with the first cohort default rate published after the date of the change, your cohort default rates for the next 3 fiscal years are determined by including the applicable borrowers from your institution and your former parent institution (including all of its locations) in the calculation under § 668.183; and
(3) After the period described in paragraph (d)(2) of this section, your cohort default rates do not include borrowers from your former parent institution in the calculation under § 668.183.
(a)
(2) Regardless of the number of borrowers included in your cohort, your draft cohort default rate is always calculated using data for that fiscal year alone, using the method described in § 668.183(d)(1).
(3) Your draft cohort default rate and the loan record detail report are not considered public information and may not be otherwise voluntarily released by a data manager.
(4) Any challenge you submit under this section and any response provided by a data manager must be in a format acceptable to us. This acceptable format is described in the “Cohort Default Rate Guide” that we provide to you. If your challenge does not comply with the requirements in the “Cohort Default Rate Guide,” we may deny your challenge.
(b)
(i) A description of the information in the loan record detail report that you believe is incorrect; and
(ii) Documentation that supports your contention that the data are incorrect.
(2) Within 30 days after receiving your challenge, the data manager must send you and us a response that—
(i) Addresses each of your allegations of error; and
(ii) Includes the documentation that supports the data manager's position.
(3) If your data manager concludes that draft data in the loan record detail report are incorrect, and we agree, we use the corrected data to calculate your cohort default rate.
(4) If you fail to challenge the accuracy of data under this section, you cannot contest the accuracy of those data in an uncorrected data adjustment, under § 668.190, or in an erroneous data appeal, under § 668.192.
(c)
(ii) You may challenge an anticipated loss of eligibility under § 668.187(a)(2), based on three cohort default rates of 25 percent or greater, if your participation rate index is equal to or less than 0.0375 for any of those three cohorts' fiscal years.
(2) For a participation rate index challenge, your participation rate index is calculated as described in § 668.195(b), except that—
(i) The draft cohort default rate is considered to be your most recent cohort default rate; and
(ii) If the cohort used to calculate your draft cohort default rate included fewer than 30 borrowers, you may calculate your participation rate index for that fiscal year using either your most recent draft cohort default rate or the average rate that would be calculated for that fiscal year, using the method described in § 668.183(d)(2).
(3) You must send your participation rate index challenge, including all supporting documentation, to us within 45 days after you receive your draft cohort default rate.
(4) We notify you of our determination on your participation rate index challenge before your official cohort default rate is published.
(5) If we determine that you qualify for continued eligibility based on your participation rate index challenge, you will not lose eligibility under § 668.187 when your next official cohort default rate is published. A successful challenge that is based on your draft cohort default rate does not excuse you from any other loss of eligibility. However, if your successful challenge of a loss of eligibility under paragraph (c)(1)(ii) of this section is based on a prior, official cohort default rate, and not on your draft cohort default rate, we also excuse you from any subsequent loss of eligibility, under § 668.187(a)(2), that would be based on that official cohort default rate.
(a) We notify you of your cohort default rate after we calculate it. After we send our notice to you, we publish a list of cohort default rates for all institutions.
(b) If your cohort default rate is 10 percent or more, we include a copy of the loan record detail report with the notice.
(c) If your cohort default rate is less than 10 percent—
(1) You may request a copy of any loan record detail report that lists loans included in your cohort default rate calculation; and
(2) If you are requesting an adjustment or appealing under this subpart, your request for a copy of the loan record detail report or reports must be sent to us within 15 days after you receive the notice of your cohort default rate.
(a)
(2) Except as provided in paragraphs (e) and (f) of this section, you lose your eligibility to participate in the FFEL, Direct Loan, and Federal Pell Grant programs 30 days after you receive our notice that your three most recent cohort default rates are each 25 percent or greater.
(b)
(1) For the remainder of the fiscal year in which we notify you that you are subject to a loss of eligibility; and
(2) For the next 2 fiscal years.
(c)
(1) Any concurrent or subsequent loss of eligibility under this section; or
(2) Any other action by us.
(d)
(e)
(1) Were ineligible to participate in the FFEL and Direct Loan programs before October 7, 1998, and your eligibility was not reinstated;
(2) Requested in writing, before October 7, 1998, to withdraw your participation in the FFEL and Direct Loan programs, and you were not later reinstated; or
(3) Have not certified an FFELP loan or originated a Direct Loan Program loan on or after July 7, 1998.
(f)
(2) Eligibility continued under paragraph (f)(1) of this section ends if we determine that none of the requests for adjustments and appeals you have submitted qualify you for continued eligibility under § 668.189. Loss of eligibility takes effect on the date that you receive notice of our determination on your last pending request for adjustment or appeal.
(3) You do not lose eligibility under this section if we determine that your request for adjustment or appeal meets all requirements of this subpart and qualifies you for continued eligibility under § 668.189.
(4) To avoid liabilities you might otherwise incur under paragraph (g) of this section, you may choose to suspend
(g)
(1) For any FFEL or Direct Loan Program loan that you certified and delivered or originated and disbursed more than 30 days after you received the notice of your cohort default rate, we estimate the amount of interest, special allowance, reinsurance, and any related or similar payments we make or are obligated to make on those loans;
(2) We exclude from this estimate any amount attributable to funds that you delivered or disbursed more than 45 days after you submitted your completed appeal to us;
(3) We notify you of the estimated amount; and
(4) Within 45 days after you receive our notice of the estimated amount, you must pay us that amount, unless—
(i) You file an appeal under the procedures established in subpart H of this part (for the purposes of subpart H of this part, our notice of the estimate is considered to be a final program review determination); or
(ii) We permit a longer repayment period.
(h)
(1) The period described in paragraph (b) of this section has ended;
(2) You pay any amount owed to us under this section or are meeting that obligation under an agreement acceptable to us;
(3) You submit a new application for participation in the program;
(4) We determine that you meet all of the participation requirements in effect at the time of your application; and
(5) You and we enter into a new program participation agreement.
(a)
(1) You and the ineligible institution are both parties to a transaction that results in a change of ownership, a change in control, a merger, a consolidation, an acquisition, a change of name, a change of address, any change that results in a location becoming a freestanding institution, a purchase or sale, a transfer of assets, an assignment, a change of identification number, a contract for services, an addition or closure of one or more locations or branches or educational programs, or any other change in whole or in part in institutional structure or identity;
(2) Following the change described in paragraph (a)(1) of this section, you offer an educational program at substantially the same address at which the ineligible institution had offered an educational program before the change; and
(3) There is a commonality of ownership or management between you and the ineligible institution, as the ineligible institution existed before the change.
(b)
(1) Holds or held a managerial role; or
(2) Has or had the ability to affect substantially the institution's actions, within the meaning of 34 CFR 600.21.
(c)
(1)(i) Within 60 days after the change described in this section, you send us the names of the managers for each facility undergoing the teach-out as it existed before the change and for each facility as it exists after you believe that the commonality of management has ended; and
(ii) We determine that the commonality of management, as described in paragraph (b)(1) of this section, has ended; or
(2)(i) Within 30 days after you receive our notice that we have denied your submission under paragraph (c)(1)(i) of this section, you make the management changes we request and send us a list of the names of the managers for each facility undergoing the teach-out as it exists after you make those changes; and
(ii) We determine that the commonality of management, as described in paragraph (b)(1) of this section, has ended.
(d)
(e)
(2) Our notice also advises you of the scope and duration of your loss of eligibility. The loss of eligibility applies to all of your locations from the date you receive our notice until the expiration of the period of ineligibility applicable to the other institution.
(3) If you are subject to a loss of eligibility under this section that has already been imposed against another institution, you may only request an adjustment or submit an appeal for the loss of eligibility under the same requirements that would be applicable to the other institution under § 668.189.
(a)
(1) We recalculate your cohort default rate, and it is below the percentage threshold for the loss of eligibility as the result of—
(i) An uncorrected data adjustment submitted under this section and § 668.190;
(ii) A new data adjustment submitted under this section and § 668.191;
(iii) An erroneous data appeal submitted under this section and § 668.192; or
(iv) A loan servicing appeal submitted under this section and § 668.193; or
(2) You meet the requirements for—
(i) An economically disadvantaged appeal submitted under this section and § 668.194;
(ii) A participation rate index appeal submitted under this section and § 668.195;
(iii) An average rates appeal submitted under this section and § 668.196; or
(iv) A thirty-or-fewer borrowers appeal submitted under this section and § 668.197.
(b)
(2) You may not request an adjustment or appeal a cohort default rate, under § 668.190, § 668.191, § 668.192, or § 668.193, more than once.
(3) You may not request an adjustment or appeal a cohort default rate, under § 668.190, § 668.191, § 668.192, or § 668.193, if you previously lost your eligibility to participate in a Title IV, HEA program, under § 668.187, based entirely or partially on that cohort default rate.
(c)
(1) All appeals, notices, requests, independent auditor's opinions, management's written assertions, and other correspondence that you are required to send under this subpart must be complete, timely, accurate, and in a format acceptable to us. This acceptable format is described in the “Cohort Default Rate Guide” that we provide to you.
(2) Your completed request for adjustment or appeal must include—
(i) All of the information necessary to substantiate your request for adjustment or appeal; and
(ii) A certification by your chief executive officer, under penalty of perjury, that all the information you provide is true and correct.
(d)
(e)
(2) If a data manager sends us correspondence under this subpart that is not in a format acceptable to us, we may require the data manager to revise that correspondence's format, and we may prescribe a format for that data manager's subsequent correspondence with us.
(f)
(2) In making our decision for an adjustment, under § 668.190 or § 668.191, or an appeal, under § 668.192 or § 668.193—
(i) We presume that the information provided to you by a data manager is correct unless you provide substantial evidence that shows the information is not correct; and
(ii) If we determine that a data manager did not provide the necessary clarifying information or legible records in meeting the requirements of this subpart, we presume that the evidence that you provide to us is correct unless it is contradicted or otherwise proven to be incorrect by information we maintain.
(3) Our decision is based on the materials you submit under this subpart. We do not provide an oral hearing.
(4) We notify you of our decision—
(i) If you request an adjustment or appeal because you are subject to a loss of eligibility under § 668.187, within 45 days after we receive your completed request for an adjustment or appeal; or
(ii) In all other cases, except for appeals submitted under § 668.192(a) to avoid provisional certification, before we notify you of your next official cohort default rate.
(5) You may not seek judicial review of our determination of a cohort default rate until we issue our decision on all pending requests for adjustments or appeals for that cohort default rate.
(a)
(b)
(2) You must send us a request for an uncorrected data adjustment, including all supporting documentation, within 30 days after you receive your loan record detail report from us.
(c)
(1) In response to your challenge under § 668.185(b), a data manager agreed to change the data;
(2) The changes described in paragraph (c)(1) of this section are not reflected in your official cohort default rate; and
(3) We agree that the data are incorrect.
(a)
(1) A comparison of the loan record detail reports that we provide to you for the draft and official cohort default rates shows that the data have been newly included, excluded, or otherwise changed; and
(2) You identify errors in the data described in paragraph (a)(1) of this section that are confirmed by the data manager.
(b)
(2) You must send the relevant data manager, or data managers, and us a request for a new data adjustment, including all supporting documentation, within 15 days after you receive your loan record detail report from us.
(3) Within 20 days after receiving your request for a new data adjustment, the data manager must send you and us a response that—
(i) Addresses each of your allegations of error; and
(ii) Includes the documentation used to support the data manager's position.
(4) Within 15 days after receiving a guaranty agency's notice that we hold an FFELP loan about which you are inquiring, you must send us your request for a new data adjustment for that loan. We respond to your request under paragraph (b)(3) of this section.
(5) Within 15 days after receiving incomplete or illegible records or data from a data manager, you must send a request for replacement records or clarification of data to the data manager and us.
(6) Within 20 days after receiving your request for replacement records or clarification of data, the data manager must—
(i) Replace the missing or illegible records;
(ii) Provide clarifying information; or
(iii) Notify you and us that no clarifying information or additional or improved records are available.
(7) You must send us your completed request for a new data adjustment, including all supporting documentation—
(i) Within 30 days after you receive the final data manager's response to your request or requests; or
(ii) If you are also filing an erroneous data appeal or a loan servicing appeal, by the latest of the filing dates required in paragraph (b)(7)(i) of this section or in § 668.192(b)(6)(i) or § 668.193(c)(10)(i).
(c)
(a)
(1) You dispute the accuracy of data that you previously challenged on the basis of incorrect data, under § 668.185(b); or
(2) A comparison of the loan record detail reports that we provide to you for the draft and official cohort default rates shows that the data have been newly included, excluded, or otherwise changed, and you dispute the accuracy of that data.
(b)
(2) Within 20 days after receiving your request for verification of data errors, the data manager must send you and us a response that—
(i) Addresses each of your allegations of error; and
(ii) Includes the documentation used to support the data manager's position.
(3) Within 15 days after receiving a guaranty agency's notice that we hold an FFELP loan about which you are inquiring, you must send us your request for verification of that loan's data errors. Your request must include a description of the information in the cohort default rate data that you believe is incorrect and all supporting documentation that demonstrates the error. We respond to your request under paragraph (b)(2) of this section.
(4) Within 15 days after receiving incomplete or illegible records or data, you must send a request for replacement records or clarification of data to the data manager and us.
(5) Within 20 days after receiving your request for replacement records or clarification of data, the data manager must—
(i) Replace the missing or illegible records;
(ii) Provide clarifying information; or
(iii) Notify you and us that no clarifying information or additional or improved records are available.
(6) You must send your completed appeal to us, including all supporting documentation—
(i) Within 30 days after you receive the final data manager's response to your request; or
(ii) If you are also requesting a new data adjustment or filing a loan servicing appeal, by the latest of the filing dates required in paragraph (b)(6)(i) of this section or in § 668.191(b)(7)(i) or § 668.193(c)(10)(i).
(c)
(a)
(1) Your most recent cohort default rate; or
(2) Any cohort default rate upon which a loss of eligibility under § 668.187 is based.
(b)
(1) Send at least one letter (other than the final demand letter) urging the borrower to make payments on the loan;
(2) Attempt at least one phone call to the borrower;
(3) Send a final demand letter to the borrower;
(4) For a Direct Loan Program loan only, document that skip tracing was performed if the Direct Loan Servicer determined that it did not have the borrower's current address; and
(5) For an FFELP loan only—
(i) Submit a request for preclaims or default aversion assistance to the guaranty agency; and
(ii) Submit a certification or other documentation that skip tracing was performed to the guaranty agency.
(c)
(2) You must send a request for loan servicing records to the relevant data manager, or data managers, and to us within 15 days after you receive your loan record detail report from us. If the data manager is a guaranty agency,
(3) Within 20 days after receiving your request for loan servicing records, the data manager must—
(i) Send you and us a list of the borrowers in your representative sample, as described in paragraph (d) of this section (the list must be in social security number order, and it must include the number of defaulted loans included in the cohort for each listed borrower);
(ii) Send you and us a description of how your representative sample was chosen; and
(iii) Either send you copies of the loan servicing records for the borrowers in your representative sample and send us a copy of its cover letter indicating that the records were sent, or send you and us a notice of the amount of its fee for providing copies of the loan servicing records.
(4) The data manager may charge you a reasonable fee for providing copies of loan servicing records, but it may not charge more than $10 per borrower file. If a data manager charges a fee, it is not required to send the documents to you until it receives your payment of the fee.
(5) If the data manager charges a fee for providing copies of loan servicing records, you must send payment in full to the data manager within 15 days after you receive the notice of the fee.
(6) If the data manager charges a fee for providing copies of loan servicing records, and—
(i) You pay the fee in full and on time, the data manager must send you, within 20 days after it receives your payment, a copy of all loan servicing records for each loan in your representative sample (the copies are provided to you in hard copy format unless the data manager and you agree that another format may be used), and it must send us a copy of its cover letter indicating that the records were sent; or
(ii) You do not pay the fee in full and on time, the data manager must notify you and us of your failure to pay the fee and that you have waived your right to challenge the calculation of your cohort default rate based on the data manager's records. We accept that determination unless you prove that it is incorrect.
(7) Within 15 days after receiving a guaranty agency's notice that we hold an FFELP loan about which you are inquiring, you must send us your request for the loan servicing records for that loan. We respond to your request under paragraph (c)(3) of this section.
(8) Within 15 days after receiving incomplete or illegible records, you must send a request for replacement records to the data manager and us.
(9) Within 20 days after receiving your request for replacement records, the data manager must either—
(i) Replace the missing or illegible records; or
(ii) Notify you and us that no additional or improved copies are available.
(10) You must send your appeal to us, including all supporting documentation—
(i) Within 30 days after you receive the final data manager's response to your request for loan servicing records; or
(ii) If you are also requesting a new data adjustment or filing an erroneous data appeal, by the latest of the filing dates required in paragraph (c)(10)(i) of this section or in § 668.191(b)(7)(i) or § 668.192(b)(6)(i).
(d)
(2) From the group of borrowers identified under paragraph (d)(1) of this section, the data manager identifies a sample that is large enough to derive an estimate, acceptable at a 95 percent confidence level with a plus or minus 5 percent confidence interval, for use in determining the number of borrowers who should be excluded from the calculation of the cohort default rate due to improper loan servicing or collection.
(e)
(1) Provided to the guaranty agency by the lender and used by the guaranty agency in determining whether to pay a claim on a defaulted loan; or
(2) Maintained by our Direct Loan Servicer that are used in determining your cohort default rate.
(f)
(2) Based on our determination, we use a statistically valid methodology to exclude the corresponding percentage of borrowers from both the numerator and denominator of the calculation of your cohort default rate.
(a)
(1) You offer an associate, baccalaureate, graduate, or professional degree, and your completion rate is 70 percent or more; or
(2) You do not offer an associate, baccalaureate, graduate, or professional degree, and your placement rate is 44 percent or more.
(b)
(i) For an award year that overlaps the 12-month period selected under paragraph (b)(2) of this section, have an expected family contribution, as defined in 34 CFR 690.2, that is equal to or less than the largest expected family contribution that would allow a student to receive one-half of the maximum Federal Pell Grant award, regardless of the student's enrollment status or cost of attendance; or
(ii) For a calendar year that overlaps the 12-month period selected under paragraph (b)(2) of this section, have an adjusted gross income that, when added to the adjusted gross income of the student's parents (if the student is a dependent student) or spouse (if the student is a married independent student), is less than the amount listed in the Department of Health and Human Services poverty guidelines for the size of the student's family unit.
(2) The students who are used to determine your low income rate include only students who were enrolled on at least a half-time basis in an eligible program at your institution during any part of a 12-month period that ended during the 6 months immediately preceding the cohort's fiscal year.
(c)
(i) Completed the educational programs in which they were enrolled;
(ii) Transferred from your institution to a higher level educational program;
(iii) Remained enrolled and are making satisfactory progress toward completion of their educational programs at the end of the same 12-month period used to calculate the low income rate; or
(iv) Entered active duty in the Armed Forces of the United States within 1 year after their last date of attendance at your institution.
(2) The students who are used to determine your completion rate include only regular students who were—
(i) Initially enrolled on a full-time basis in an eligible program; and
(ii) Originally scheduled to complete their programs during the same 12-month period used to calculate the low income rate.
(d)
(i) Are employed, in an occupation for which you provided training, on the date following 1 year after their last date of attendance at your institution;
(ii) Were employed for at least 13 weeks, in an occupation for which you provided training, between the date they enrolled at your institution and the first date that is more than a year after their last date of attendance at your institution; or
(iii) Entered active duty in the Armed Forces of the United States within 1 year after their last date of attendance at your institution.
(2) For the purposes of this section, a former student is not considered to have been employed based on any employment by your institution.
(3) The students who are used to determine your placement rate include only former students who—
(i) Were initially enrolled in an eligible program on at least a half-time basis;
(ii) Were originally scheduled, at the time of enrollment, to complete their educational programs during the same 12-month period used to calculate the low income rate; and
(iii) Remained in the program beyond the point at which a student would have received a 100 percent tuition refund from you.
(4) A student is not included in the calculation of your placement rate if that student, on the date that is 1 year after the student's originally scheduled completion date, remains enrolled in the same program and is making satisfactory progress.
(e)
(1) For a student who is initially enrolled full-time, the amount of time specified in your enrollment contract, catalog, or other materials for completion of the program by a full-time student; or
(2) For a student who is initially enrolled less than full-time, the amount of time that it would take the student to complete the program if the student remained at that level of enrollment throughout the program.
(f)
(2) Within 60 days after you receive the notice of your loss of eligibility, you must send us the independent auditor's opinion described in paragraph (g) of this section.
(g)
(2) The engagement that forms the basis of the independent auditor's opinion must be an examination-level compliance attestation engagement performed in accordance with—
(i) The American Institute of Certified Public Accountant's (AICPA) Statement on Standards for Attestation Engagements, Compliance Attestation (AICPA, Professional Standards, vol. 1, AT sec. 500), as amended (these standards may be obtained by calling the AICPA's order department, at 1-888-777-7077); and
(ii) Government Auditing Standards issued by the Comptroller General of the United States.
(h)
(1) Your independent auditor's opinion agrees that you meet the requirements for an economically disadvantaged appeal; and
(2) We determine that the independent auditor's opinion and your management's written assertion—
(i) Meet the requirements for an economically disadvantaged appeal; and
(ii) Are not contradicted or otherwise proven to be incorrect by information we maintain, to an extent that would render the independent auditor's opinion unacceptable.
(a)
(2) You may appeal a notice of a loss of eligibility under § 668.187(a)(2), based on three cohort default rates of 25 percent or greater, if your participation rate index is equal to or less than 0.0375
(b)
(i) The number of students who received an FFELP or a Direct Loan Program loan to attend your institution during a period of enrollment, as defined in 34 CFR 682.200 or 685.102, that overlaps any part of a 12-month period that ended during the 6 months immediately preceding the cohort's fiscal year, by
(ii) The number of regular students who were enrolled at your institution on at least a half-time basis during any part of the same 12-month period.
(2) If your cohort default rate for a fiscal year is calculated as an average rate under § 668.183(d)(2), you may calculate your participation rate index for that fiscal year using either that average rate or the cohort default rate that would be calculated for the fiscal year alone using the method described in § 668.183(d)(1).
(c)
(d)
(2) If we determine that your participation rate index for a fiscal year is equal to or less than 0.0375, under paragraph (d)(1) of this section, we also excuse you from any subsequent loss of eligibility under § 668.187(a)(2) that would be based on the official cohort default rate for that fiscal year.
(a)
(2) You may appeal a notice of a loss of eligibility under § 668.187(a)(2), based on three cohort default rates of 25 percent or greater, if at least two of those cohort default rates—
(i) Are calculated as average rates under § 668.183(d)(2); and
(ii) Would be less than 25 percent if calculated for the fiscal year alone using the method described in § 668.183(d)(1).
(b)
(2) If you disagree with our initial determination, you must send us your average rates appeal, including all supporting documentation, within 30 days after you receive the notice of your loss of eligibility.
(c)
(a)
(b)
(2) If you disagree with our initial determination, you must send us your thirty-or-fewer borrowers appeal, including all supporting documentation,
(c)
(a)
(1) Historically black college or university as defined in section 322(2) of the HEA;
(2) Tribally controlled community college as defined in section 2(a)(4) of the Tribally Controlled Community College Assistance Act of 1978; or
(3) Navajo community college under the Navajo Community College Act.
(b)
(1) By July 1 of the first 1-year period that begins after you receive our notice of a loss of eligibility under § 668.187—
(i) A default management plan; and
(ii) A certification that you have engaged an independent third party, as described in this section; and
(2) By July 1 of each subsequent 1-year period—
(i) Evidence that you have implemented your default management plan during the preceding 1-year period;
(ii) Evidence that you have made substantial improvement in the preceding 1-year period in your cohort default rate; and
(iii) A certification that you continue to engage an independent third party, as described in this section.
(c)
(i) Establishing a default management team by engaging your chief executive officer and relevant senior executive officials and enlisting the support of representatives from offices other than the financial aid office;
(ii) Identifying and allocating the personnel, administrative, and financial resources appropriate to implement the default management plan;
(iii) Defining the roles and responsibilities of the independent third party;
(iv) Defining evaluation methods and establishing a data collection system for measuring and verifying relevant default management statistics, including a statistical analysis of the borrowers who default on their loans;
(v) Establishing annual targets for reductions in your cohort default rate; and
(vi) Establishing a process to ensure the accuracy of your cohort default rate.
(2) We will determine whether your default management plan is acceptable, after considering your history, resources, dollars in default, and targets for default reduction in making this determination.
(3) If we determine that your proposed default management plan is unacceptable, you must consult with us to develop a revised plan and submit the revised plan to us within 30 days after you receive our notice that your proposed plan is unacceptable.
(4) If we determine, based on the evidence you submit under paragraph (b)(2) of this section, that your default management plan is no longer acceptable, you must develop a revised plan in consultation with us and submit the revised plan to us within 60 days after you receive our notice that your plan is no longer acceptable.
(5) A sample default management plan is provided in appendix B to this subpart. The sample is included to illustrate components of an acceptable default management plan. Since institutions' family income profiles, student borrowing patterns, histories, resources, dollars in default, and targets for default reduction are different, you
(d)
(i) Provides technical assistance in developing and implementing your default management plan; and
(ii) Is not substantially controlled by a person who also exercises substantial control over your institution.
(2) An independent third party need not be paid by you for its services.
(3) The services of a lender, guaranty agency, or secondary market as an independent third party under this section are not considered to be inducements under 34 CFR 682.200 or 682.401(e).
(e)
(i) A reduction in your most recent draft or official cohort default rate;
(ii) An increase in the percentage of delinquent borrowers who avoid default by using deferments, forbearances, and job placement assistance;
(iii) An increase in the academic persistence of student borrowers;
(iv) An increase in the percentage of students pursuing graduate or professional study;
(v) An increase in the percentage of borrowers for whom a current address is known;
(vi) An increase in the percentage of delinquent borrowers that you contacted;
(vii) The implementation of alternative financial aid award policies and development of financial resources that reduce the need for student borrowing; or (viii) An increase in the percentage of accurate and timely enrollment status changes that you submitted to the National Student Loan Data System (NSLDS) on the Student Status Confirmation Report (SSCR).
(2) When making a determination of your substantial improvement, we consider your performance in light of—
(i) Your history, resources, dollars in default, and targets for default reduction;
(ii) Your level of effort in meeting the terms of your approved default management plan during the previous 1-year period; and
(iii) Any other mitigating circumstance at your institution during the 1-year period.
(f)
(2) If we determine that you are not in compliance with this section, you are subject to the provisions of §§ 668.187 and 668.16(m). You lose your eligibility to participate in the FFEL, Direct Loan, and Federal Pell Grant programs on the date you receive our notice of the determination.
Some types of appeals may be submitted only if you are subject to a loss of eligibility under § 668.187 or to provisional certification under § 668.16(m). These types of appeals are identified in the following table. Submission deadlines are described in the paragraphs and sections that are cited in the table. For example, although you may submit an uncorrected data adjustment, new data adjustment, or loan servicing appeal if you are subject to provisional certification, the deadlines for those submissions are based on the date you receive your cohort default rate, not the date you receive the notice of your provisional certification.
1.
2.
(i) For
(ii) For
3.
(i) If you
(ii) If you
This appendix is provided as a sample plan for those institutions developing a default management plan in accordance with § 668.198. It describes some measures you may find helpful in reducing the number of students that default on federally funded loans. These are not the only measures you could
1. Establish a default management team by engaging your chief executive officer and relevant senior executive officials and enlisting the support of representatives from offices other than the financial aid office.
2. Identify and allocate the personnel, administrative, and financial resources appropriate to implement the default management plan.
3. Define the roles and responsibilities of the independent third party.
4. Define evaluation methods and establish a data collection system for measuring and verifying relevant default management statistics, including a statistical analysis of the borrowers who default on their loans.
5. Establish annual targets for reductions in your rate.
6. Establish a process to ensure the accuracy of your rate.
1. Enhance the borrower's understanding of his or her loan repayment responsibilities through counseling and debt management activities.
2. Enhance the enrollment retention and academic persistence of borrowers through counseling and academic assistance.
3. Maintain contact with the borrower after he or she leaves your institution by using activities such as skip tracing to locate the borrower.
4. Track the borrower's delinquency status by obtaining reports from data managers and FFEL Program lenders.
5. Enhance student loan repayments through counseling the borrower on loan repayment options and facilitating contact between the borrower and the data manager or FFEL Program lender.
6. Assist a borrower who is experiencing difficulty in finding employment through career counseling, job placement assistance, and facilitating unemployment deferments.
7. Identify and implement alternative financial aid award policies and develop alternative financial resources that will reduce the need for student borrowing in the first 2 years of academic study.
8. Familiarize the parent, or other adult relative or guardian, with the student's debt profile, repayment obligations, and loan status by increasing, whenever possible, the communication and contact with the parent or adult relative or guardian.
1. Specifically define the role of the independent third party.
2. Specify the scope of work to be performed by the independent third party.
3. Tie the receipt of payments, if required, to the performance of specific tasks.
4. Assure that all the required work is satisfactorily completed.
1. The number of students enrolled at your institution during each fiscal year.
2. The average amount borrowed by a student each fiscal year.
3. The number of borrowers scheduled to enter repayment each fiscal year.
4. The number of enrolled borrowers who received default prevention counseling services each fiscal year.
5. The average number of contacts that you or your agent had with a borrower who was in deferment or forbearance or in repayment status during each fiscal year.
6. The number of borrowers at least 60 days delinquent each fiscal year.
7. The number of borrowers who defaulted in each fiscal year.
8. The type, frequency, and results of activities performed in accordance with the default management plan.
20 U.S.C. 1123, unless otherwise noted.
The Language Resource Centers Program makes awards, through grants or contracts, for the purpose of establishing, strengthening, and operating centers that serve as resources for improving the nation's capacity for teaching and learning foreign languages effectively.
An institution of higher education or a combination of institutions of higher education is eligible to receive an award under this part.
Centers funded under this part must carry out activities to improve the teaching and learning of foreign languages. These activities must include effective dissemination efforts, whenever appropriate, and may include—
(a) The conduct and dissemination of research on new and improved methods for teaching foreign languages, including the use of advanced educational technology;
(b) The development and dissemination of new materials for teaching foreign languages, to reflect the results of research on effective teaching strategies;
(c) The development, application, and dissemination of performance testing that is appropriate for use in an educational setting to be used as a standard and comparable measurement of skill levels in foreign languages;
(d) The training of teachers in the administration and interpretation of foreign language performance tests, the use of effective teaching strategies, and the use of new technologies;
(e) A significant focus on the teaching and learning needs of the less commonly taught languages, including an assessment of the strategic needs of the United States, the determination of ways to meet those needs nationally, and the publication and dissemination of instructional materials in the less commonly taught languages;
(f) The development and dissemination of materials designed to serve as a resource for foreign language teachers at the elementary and secondary school levels; and
(g) The operation of intensive summer language institutes to train advanced foreign language students, to provide professional development, and to improve language instruction through preservice and inservice language training for teachers.
The following regulations apply to this program:
(a) The regulations in 34 CFR part 655.
(b) The regulations in this part 669.
The following definitions apply to this part:
(a) The definitions in 34 CFR 655.4.
(b) “Language Resource Center” means a coordinated concentration of educational research and training resources for improving the nation's capacity to teach and learn foreign languages.
(a) The Secretary evaluates an application for an award on the basis of the criteria contained in § 669.21.
(b) The Secretary awards up to 100 possible points for these criteria. However, if the Secretary establishes one or more priorities under § 669.22, the
(c) The maximum possible points for each criterion are shown in parentheses.
The Secretary uses the following criteria in evaluating applications under this part:
(a)
(b)
(c)
(d)
(e)
(f)
(1) The extent to which the proposed materials or activities are needed in the foreign languages on which the project focuses;
(2) The extent to which the proposed materials may be used throughout the United States; and
(3) The extent to which the proposed work or activity may contribute significantly to strengthening, expanding, or improving programs of foreign language study in the United States.
(g)
(1) The quality of the outlined methods and procedures for preparing the materials; and
(2) The extent to which plans for carrying out activities are practicable and can be expected to produce the anticipated results.
(h)
(i)
(a) The Secretary may each year select funding priorities from among the following:
(1) Categories of allowable activities described in § 669.3.
(2) Specific foreign languages for study or materials development.
(3) Levels of education, for example, elementary, secondary, postsecondary, or teacher education.
(b) The Secretary announces any priorities in the application notice published in the
Equipment costs may not exceed fifteen percent of the grant amount.
20 U.S.C. 421-429, 1070b-1070b-3, and 1087aa-1087ii; 42 U.S.C. 2751-2756b, unless otherwise noted.
This part governs the following three programs authorized by title IV of the Higher Education Act of 1965, as amended (HEA) that participating institutions administer:
(a) The Federal Perkins Loan Program, which encourages the making of loans by institutions to needy undergraduate and graduate students to help pay for their cost of education.
(b) The Federal Work-Study (FWS) Program, which encourages the part-time employment of undergraduate and graduate students who need the income to help pay for their cost of education and which encourages FWS recipients to participate in community service activities.
(c) The Federal Supplemental Educational Opportunity Grant (FSEOG) Program, which encourages the providing of grants to exceptionally needy undergraduate students to help pay for their cost of education.
The participating institution is responsible for administering these programs in accordance with the regulations in this part and the applicable program regulations in 34 CFR parts 674, 675, and 676.
(a) To participate in the Federal Perkins Loan, FWS, or FSEOG programs, an institution shall file an application before the deadline date established annually by the Secretary through publication of a notice in the
(b) The application for the Federal Perkins Loan, FWS, and FSEOG programs must be on a form approved by the Secretary and must contain the information needed by the Secretary to determine the institution's allocation or reallocation of funds under sections 462, 442, and 413D of the HEA, respectively.
(a)
(2) The Secretary reallocates Federal capital contributions to institutions participating in the Federal Perkins Loan Program by—
(i) Reallocating 80 percent of the total funds available in accordance with section 462(j) of the HEA; and
(ii) Reallocating 20 percent of the total funds available in a manner that best carries out the purposes of the Federal Perkins Loan Program.
(b)
(c)
(2) The Secretary reallocates funds to institutions participating in the FSEOG Program in a manner that best carries out the purposes of the FSEOG Program.
(d)
(i) Cosmetology.
(ii) Business.
(iii) Trade/Technical.
(iv) Art Schools.
(v) Other Proprietary Institutions.
(vi) Non-Proprietary Institutions.
(2)
(3)
(ii) The Secretary may waive the provision of paragraph (d)(3)(i) of this section for a specific institution if the Secretary finds that enforcement would be contrary to the interests of the program.
(iii) The Secretary considers enforcement of paragraph (d)(3)(i) of this section to be contrary to the interest of the program only if the institution returns more than 10 percent of its allocation due to circumstances beyond the institution's control that are not expected to recur.
(e)
(2) The Secretary may waive the provision of paragraph (e)(1) of this section for any institution that has a cohort default rate that does not exceed 7.5 percent.
(f)
(1) To meet FWS wage obligations incurred with regard to an award of FWS employment made for any other award year; or
(2) To satisfy any other obligation incurred after the end of the designated award year.
(g)
(1) To make FSEOG disbursements to students in any other award year; or
(2) To satisfy any other obligation incurred after the end of the designated award year.
(a)
(2)
(b)
(i) Can reasonably anticipate at the time it awards Federal Perkins Loan funds, an FSEOG, or FWS funds to the student;
(ii) Makes available to its students; or
(iii) Otherwise knows about.
(2) If a student receives resources at any time during the award period that were not considered in calculating the Federal Perkins Loan amount or the FWS or FSEOG award, and the total resources including the loan, the FSEOG, or the prospective FWS wages exceed the student's need, the overaward is the amount that exceeds need.
(c)
(i) Funds a student is entitled to receive from a Federal Pell Grant;
(ii) William D. Ford Federal Direct Loans;
(iii) Federal Family Education Loans;
(iv) Long-term loans, including Federal Perkins loans made by the institution;
(v) Grants, including FSEOGs, State grants, and ROTC subsistence allowances;
(vi) Scholarships, including athletic scholarships and ROTC scholarships;
(vii) Waivers of tuition and fees;
(viii) Fellowships or assistantships;
(ix) Veterans educational benefits paid under Chapters 30, 31, 32, and 35 of title 38 of the United States Code;
(x) National service education awards or post-service benefits paid for the cost of attendance under title I of the National and Community Service Act of 1990 (AmeriCorps);
(xi) Net earnings from need-based employment; and
(xii) Insurance programs for the student's education.
(2) The Secretary does not consider as a resource—
(i) Any portion of the resources described in paragraph (c)(1) of this section that are included in the calculation of the student's expected family contribution (EFC); and
(ii) Earnings from non-need-based employment.
(3) The institution may treat a Federal Direct PLUS Loan, a Federal PLUS Loan, a Federal Direct Unsubsidized Stafford/Ford Loan, a Federal Unsubsidized Stafford Loan, or a State-sponsored or private loan as a substitute for a student's EFC. However, if the sum of the loan amounts received exceeds the student's EFC, the excess is a resource.
(4) The institution may exclude as a resource any portion of a Federal Direct Stafford/Ford Loan (Direct Subsidized Loan) and subsidized Federal Stafford Loan that is equal to or less than the amount of a student's veterans education benefits paid under Chapter 30 of title 38 of the United States Code (Montgomery GI Bill) and national service education awards or post service benefits paid for the cost of attendance under title I of the National and Community Service Act of 1990 (AmeriCorps).
(d)
(1) The institution shall decide whether the student has increased financial need that was unanticipated when it awarded financial aid to the student. If the student demonstrates increased financial need and the total resources do not exceed this increased need by more than $300, no further action is necessary.
(2) If the student's total resources still exceed his or her need by more than $300, as recalculated pursuant to paragraph (d)(1) of this section, the institution shall cancel any undisbursed loan or grant (other than a Federal Pell Grant).
(3)
(e)
(2) Notwithstanding the provisions of paragraph (e)(1) of this section, an institution may provide additional FWS funding to a student whose need has been met until that student's cumulative earnings from all need-based employment occurring subsequent to the time his or her financial need has been met exceed $300.
(f)
(2) The institution is liable for a Federal Perkins loan or FSEOG overpayment if the overpayment occurred because the institution failed to follow the procedures in this part or 34 CFR parts 668, 674, or 676. The institution shall restore an amount equal to the overpayment and any administrative cost allowance claimed on that amount to its loan fund for a Federal Perkins loan overpayment or to its FSEOG account for an FSEOG overpayment.
(3) A student is not liable for, and the institution is not required to attempt recovery of, a Federal Perkins loan or FSEOG overpayment, nor is the institution required to refer an FSEOG overpayment to the Secretary, if the overpayment—
(i) Is less than $25; and
(ii) Is neither a remaining balance nor a result of the application of the overaward threshold in paragraph (d) of this section.
(4)(i) Except as provided in paragraph (f)(3) of this section, if an institution makes a Federal Perkins loan or FSEOG overpayment for which it is not liable, it shall promptly send a written notice to the student requesting repayment of the overpayment amount. The notice must state that failure to make that repayment, or to make arrangements satisfactory to the holder of the overpayment debt to pay the overpayment, makes the student ineligible for further title IV, HEA program funds until final resolution of the overpayment.
(ii) If a student objects to the institution's Federal Perkins loan or FSEOG overpayment determination on the grounds that it is erroneous, the institution shall consider any information provided by the student and determine whether the objection is warranted.
(5) Except as provided in paragraph (f)(3) of this section, if a student fails to repay an FSEOG overpayment or make arrangements satisfactory to the holder of the overpayment debt to repay the FSEOG overpayment after the institution has taken the action required by paragraph (f)(4) of this section, the institution must refer the FSEOG overpayment to the Secretary for collection purposes in accordance with procedures required by the Secretary. After referring the FSEOG overpayment to the Secretary under this section, the institution need make no further effort to recover the overpayment.
(a)
(1) From resources other than the BIA education grant the student has received or is expected to receive; and
(2) That is consistent in type and amount with packages prepared for students in similar circumstances who are not eligible for a BIA education grant.
(b)(1) The BIA education grant, whether received by the student before or after the preparation of the student aid package, supplements the student aid package specified in paragraph (a) of this section.
(2) No adjustment may be made to the student aid package as long as the total of the package and the BIA education grant is less than the institution's determination of that student's financial need.
(c)(1) If the BIA education grant, when combined with other aid in the package, exceeds the student's need, the excess must be deducted from the other assistance (except for Federal Pell Grants), not from the BIA education grant.
(2) The institution shall deduct the excess in the following sequence: loans, work-study awards, and grants other
(d) To determine the financial need of a student who is also eligible for a BIA education grant, a financial aid administrator is encouraged to consult with area officials in charge of BIA postsecondary financial aid.
(a) An institution participating in the Federal Perkins Loan, FWS, or FSEOG programs is entitled to an administrative cost allowance for an award year if it advances funds under the Federal Perkins Loan Program, provides FWS employment, or awards grants under the FSEOG Program to students in that year.
(b) An institution may charge the administrative cost allowance calculated in accordance with paragraph (c) of this section for an award year against-(1) The Federal Perkins Loan Fund, if the institution advances funds under the Federal Perkins Loan Program to students in that award year;
(2) The FWS allocation, if the institution provides FWS employment to students in that award year; and
(3) The FSEOG allocation, if the institution awards grants to students under the FSEOG program in that award year.
(c) For any award year, the amount of the administrative costs allowance equals—
(1) Five percent of the first $2,750,000 of the institution's total expenditures to students in that award year under the FWS, FSEOG, and the Federal Perkins Loan programs; plus
(2) Four percent of its expenditures to students that are greater than $2,750,000 but less than $5,500,000; plus
(3) Three percent of its expenditures to students that are $5,500,000 or more.
(d) The institution shall not include, when calculating the allowance in paragraph (c) of this section, the amount of loans made under the Federal Perkins Loan Program that it assigns during the award year to the Secretary under section 463(a)(6) of the HEA.
(e) An institution shall use its administrative costs allowance to offset its cost of administering the Federal Pell Grant, FWS, FSEOG, and Federal Perkins Loan programs. Administrative costs also include the expenses incurred for carrying out the student consumer information services requirements of subpart D of the Student Assistance General Provisions regulations, 34 CFR part 668.
(f) An institution may use up to 10 percent of the administrative costs allowance, as calculated under paragraph (c) of this section, that is attributable to the institution's expenditures under the FWS program to pay the administrative costs of conducting its program of community service. These costs may include the costs of—
(1) Developing mechanisms to assure the academic quality of a student's experience;
(2) Assuring student access to educational resources, expertise, and supervision necessary to achieve community service objectives; and
(3) Collaborating with public and private nonprofit agencies and programs assisted under the National and Community Service Act of 1990 in the planning, development, and administration of these programs.
(g) If an institution charges any administrative cost allowance against its Federal Perkins Loan Fund, it must charge these costs during the same award year in which the expenditures for these costs were made.
An asterisk (*) indicates provisions that are common to parts 674, 675, and 676. The use of asterisks will assure participating institutions that a provision of one regulation is identical to the corresponding provisions in the other two.
20 U.S.C. 1087aa-1087hh and 20 U.S.C. 421-429 unless otherwise noted.
Nomenclature changes to part 674 appear at 65 FR 18002, 18003, Apr. 6, 2000.
(a) The Federal Perkins Loan Program provides low-interest loans to financially needy students attending institutions of higher education to help them pay their educational costs.
(b)(1) The Federal Perkins Loan Program, authorized by title IV-E of the Higher Education Act of 1965, as amended, and previously named the National Direct Student Loan (NDSL) Program, is a continuation of the National Defense Loan Program authorized by title II of the National Defense Education Act of 1958. All rights, privileges, duties, functions, and obligations existing under title II before the enactment of title IV-E continue to exist.
(2) The Secretary considers any student loan fund established under title IV-E to include the assets of an institution's student loan fund established under title II.
*(c) Provisions in these regulations that are common to all campus-based programs are identified with an asterisk.
(d) Provisions in these regulations that refer to “loans” or “student loans” apply to all loans made under
(a) The definitions of the following terms used in this part are set forth in subpart A of the Student Assistance General Provisions, 34 CFR part 668:
(b) The Secretary defines other terms used in this part as follows:
*
*
(1) Is enrolled in a program or course above the baccalaureate level at an institution of higher education or is enrolled in a program leading to a first professional degree;
(2) Has completed the equivalent of at least three years of full-time study at an institution of higher education, either prior to entrance into the program or as part of the program itself; and
(3) Is not receiving title IV aid as an undergraduate student for the same period of enrollment.
(1) 6 semester hours or 6 quarter hours per academic term for an institution using a standard semester, trimester, or quarter system.
(2) 12 semester hours or 18 quarter hours per academic year for an institution using credit hours to measure progress, but not using a standard semester, trimester, or quarter system; or the prorated equivalent for a program of less than one year.
(3) 12 clock hours per week for an institution using clock hours.
(4) 12 hours of preparation per week for a student enrolled in a program of study by correspondence. Regardless of the workload, no student enrolled solely in correspondence study is considered more than half-time.
*
*
(a)
(1)
(2)
(i)
(A)
(B)
(C)
(ii)
(A) Liquidate its revolving student loan fund by making a capital distribution of the liquid assets of the Fund according to section 466(c) of the HEA; and
(B) Assign any outstanding loans in the institution's portfolio to the Secretary in accordance with § 674.50.
(iii)
(b)
(2) For any award year in which less than 30 current and former students at the institution enter repayment on a loan received for attendance at the institution, the “cohort default rate” means the percentage of those current and former students who entered repayment on loans received for attendance at that institution in any of the three most recent award years and who defaulted on those loans before the end of the award year immediately following the year in which they entered repayment.
(c)
(1) A borrower must be included only if the borrower's default has persisted for at least—
(i) 240 consecutive days for loans repayable in monthly installments; or
(ii) 270 consecutive days for loans repayable in quarterly installments;
(2) A loan is considered to be in default if a payment is made by the institution of higher education, its owner, agency, contractor, employee, or any other entity or individual affiliated with the institution, in order to avoid default by the borrower;
(3)(i) In determining the number of borrowers who default before the end of the following award year, a loan is excluded if the borrower has—
(A) Voluntarily made six consecutive monthly payments;
(B) Voluntarily made all payments currently due;
(C) Repaid the full amount due, including any interest, late fees, and collection costs that have accrued on the loan;
(D) Received a deferment or forbearance based on a condition that predates the borrower reaching a 240- or 270-day past due status;
(E) Rehabilitated the loan after becoming 240- or 270-days past due; or
(F) Assigned to the Secretary in accordance with § 674.61(b).
(ii) A loan is considered canceled and also excluded from an institution's cohort default rate calculation if the loan is—
(A) Discharged due to death or permanent and total disability;
(B) Discharged in bankruptcy;
(C) Discharged due to a closed school; or
(D) Repaid in full in accordance with § 674.33(e) or § 674(h).
(iii) For the purpose of this section, funds obtained by income tax offset, garnishment, income or asset execution, or pursuant to a judgment are not considered voluntary.
(4) In the case of a student who has attended and borrowed at more than one institution, the student and his or her subsequent repayment or default are attributed to the institution for attendance at which the student received the loan that entered repayment in the award year.
(d)
(2) A cohort default rate of an institution applies to all locations of the institution from the date the institution is notified of that rate until the institution is notified by the Secretary that the rate no longer applies.
(3) For an institution that changes status from a location of one institution to a free-standing institution, the Secretary determines the cohort default rate based on the institution's status as of July 1 of the award year for which a cohort default rate is being calculated.
(4)(i) For an institution that changes status from a free-standing institution to a location of another institution, the Secretary determines the cohort default rate based on the combined number of students who enter repayment during the applicable award year and the combined number of students who default during the applicable award years from both the former free-standing institution and the other institution. This cohort default rate applies to the new consolidated institution and all of its current locations.
(ii) For free-standing institutions that merge, the Secretary determines the cohort default rate based on the combined number of students who enter repayment during the applicable award year and the combined number of students who default during the applicable award years from both of the institutions that are merging. This cohort default rate applies to the new, consolidated institution.
(iii) For an institution that changes status from a location of one institution to a location of another institution, the Secretary determines the cohort default rate based on the combined number of students who enter repayment during the applicable award year and the number of students who default during the applicable award years from both of the institutions in their entirety, not limited solely to the respective locations.
(5) For an institution that has a change in ownership that results in a change in control, the Secretary determines the cohort default rate based on the combined number of students who enter repayment during the applicable award year and the combined number of students who default during the applicable award years from the institution under both the old and new control.
To participate in the Federal Perkins Loan program, an institution shall enter into a participation agreement with the Secretary. The agreement provides that the institution shall use the funds it receives solely for the purposes specified in this part and shall administer the program in accordance with the Act, this part and the Student Assistance General Provisions regulations, 34 CFR part 668. The agreement further specifically provides, among other things, that—
(a) The institution shall establish and maintain a Fund and shall deposit into the Fund—
(1) FCC received under this subpart;
(2) Except as provided in paragraph (a)(1) of § 674.7—
(i) ICC equal to at least three-seventeenths of the FCC described in
(ii) ICC equal to at least one-third of the FCC described in paragraph (a)(1) of this section in award year 1994-95 and succeeding award years;
(3) ICC equal to the amount of FCC described in paragraph (a)(1) of § 674.7 for an institution that has been granted permission by the Secretary to participate in the ELO under the Federal Perkins Loan program;
(4) Payments of principal, interest, late charges, penalty charges, and collection costs on loans from the Fund;
(5) Payments to the institution as the result of loan cancellations under section 465(b) of the Act;
(6) Any other earnings on assets of the Fund, including the interest earnings of the funds listed in paragraphs (a)(1) through (4) of this section net of bank charges incurred with regard to Fund assets deposited in interest-bearing accounts; and
(7) Proceeds of short-term no-interest loans made to the Fund in anticipation of collections or receipt of FCC.
(b) The institution shall use the money in the Fund only for—
(1) Making loans to students;
(2) Administrative expenses as provided for in 34 CFR 673.7;
(3) Capital distributions provided for in section 466 of the Act;
(4) Litigation costs (see §674.47);
(5) Other collection costs, agreed to by the Secretary in connection with the collection of principal, interest, and late charges on a loan made from the Fund (see § 674.47); and
(6) Repayment of any short-term, no-interest loans made to the Fund by the institution in anticipation of collections or receipt of FCC.
(c) The institution shall submit an annual report to the Secretary containing information that determines its cohort default rate that includes—
(1) For institutions in which 30 or more of its current or former students first entered repayment in an award year—
(i) The total number of borrowers who first entered repayment in the award year; and
(ii) The number of those borrowers in default by the end of the following award year; or
(2) For institutions in which less than 30 of its current or former students entered repayment in an award year—
(i) The total number of borrowers who first entered repayment in any of the three most recent award years; and
(ii) The number of those borrowers in default before the end of the award year immediately following the year in which they entered repayment.
(d)(1) If an institution determines not to service or collect a loan, the institution may assign its rights to the loan to the United States without recompense at the beginning of a repayment period; or
(2) If a loan is in default despite due diligence on the part of the institution in collecting the loan, the institution may assign its rights to the loan to the United States without recompense.
(e) To assist institutions in collecting outstanding loans, the Secretary provides to an institution the names and addresses of borrowers or other information relevant to collection which is available to the Secretary.
(f) The institution shall provide the loan information required by section 463A of the HEA to a borrower.
A student at an institution of higher education is eligible to receive a loan under the Federal Perkins Loan program for an award year if the student—
(a) Meets the relevant eligibility requirements contained in 34 CFR 668.32;
(b) Is enrolled or accepted for enrollment as an undergraduate, graduate, or professional student at the institution, whether or not engaged in a program of study abroad approved for credit by the home institution;
(c) Has financial need as determined in accordance with part F of title IV of the HEA. A member of a religious order (an order, community, society, agency, or organization) who is pursuing a course of study at an institution of
(1) Has as its primary objective the promotion of ideals and beliefs regarding a Supreme Being;
(2) Requires its members to forego monetary or other support substantially beyond the support it provides; and
(3) Directs the member to pursue the course of study or provides subsistence support to its members;
(d) Has received for that award year, if an undergraduate student—
(1) A SAR as a result of applying for a grant under the Federal Pell Grant Program; or
(2) A preliminary determination of eligibility or ineligibility for a Federal Pell Grant by the institution's financial aid administrator after applying for a SAR with a Federal Pell Grant Processor;
(e) Is willing to repay the loan. Failure to meet payment obligations on a previous loan is evidence that the student is unwilling to repay the loan;
(f) Provides to the institution a driver's license number, if any, at the time of application for the loan;
(g)(1) In the case of a borrower whose prior loan under title IV of the Act was discharged after a final determination of total and permanent disability, obtains a certification from a physician that the borrower is able to engage in substantial gainful activity;
(2) Signs a statement acknowledging that any new Federal Perkins or NDSL the borrower received cannot be discharged in the future on the basis of any present impairment, unless that condition substantially deteriorates; and
(3) In the case of a borrower whose previous loan under title IV of the HEA was discharged due to a total and permanent disability on or after July 1, 2001 and before July 1, 2002, meets the requirements of (g)(1) and (g)(2) of this section. If the borrower applies for another loan within three years from the date the borrower became totally and permanently disabled, as certified by the physician, the borrower must reaffirm the previously discharged loan before receiving the new loan; and
(h) In the case of a borrower whose previous loan under title IV of the HEA was conditionally discharged based on an initial determination that the borrower was totally and permanently disabled, the borrower must—
(1) Comply with the requirements of paragraphs (h)(1) and (h)(2) of this section; and
(2) Sign a statement acknowledging that—
(i) The loan that has been conditionally discharged prior to a final determination of total and permanent disability cannot be discharged in the future on the basis of any impairment present when the borrower applied for a total and permanent disability discharge or when a new loan is made, unless that impairment substantially deteriorates; and
(ii) Collection activity will resume on any loan in a conditional discharge period, as described in § 674.61(b)(9).
(i) Does not have any loans under title IV of the HEA on which collection activity has been suspended based on a conditional determination that the borrower was totally and permanently disabled. If a borrower applies for a loan under title IV of the HEA during the conditional discharge period described in §§ 674.61(b), 682.402(c), or 685.213(a), the suspension of collection activity must be ended before the borrower becomes eligible to receive any additional loans.
(j) In the case of a borrower who is in default on a Federal Perkins Loan, NDSL or Defense loan, satisfies one of the conditions contained in § 674.5(c)(3)(i) or (ii) except that—
(1) For purposes of this section, voluntary payments made by the borrower under paragraph (i) of this section are those payments made directly by the borrower; and
(2) Voluntary payments do not include payments obtained by Federal offset, garnishment, or income or asset execution.
(k) For purposes of this section, reaffirmation means the acknowledgment of the loan by the borrower in a legally binding manner. The acknowledgement may include, but is not limited to, the borrower—
(1) Signing a new promissory note or new repayment agreement; or
(2) Making a payment on the loan.
(a)(1) An institution shall make loans under this part reasonably available, to the extent of available funds, to all students eligible under § 674.9 but shall give priority to those students with exceptional financial need.
(2) The institution shall define exceptional financial need for the purpose of the priority described in paragraph (a)(1) of this section and shall develop procedures for implementing that priority.
(b) If an institution's allocation of Federal Capital Contribution is directly or indirectly based in part on the financial need demonstrated by students attending the institution as less-than-full-time or independent students, a reasonable portion of the dollar amount of loans made under this part must be offered to those students.
(c) The institution shall establish selection procedures and these procedures must be—
(1) In writing;
(2) Uniformly applied; and
(3) Maintained in the institution's files.
(a) The maximum annual amount of Federal Perkins Loans and NDSLs an eligible student may borrow is—
(1) $4,000 for a student who is enrolled in a program of undergraduate education; and
(2) $6,000 for a graduate or professional student.
(b) The aggregate unpaid principal amount of all Federal Perkins Loans and NDSLs received by an eligible student may not exceed—
(1) $20,000 for a student who has successfully completed two years of a program leading to a bachelor's degree but who has not received the degree;
(2) $40,000 for a graduate or professional student; and
(3) $8,000 for any other student.
(c) The maximum annual amounts described in paragraph (a) of this section and the aggregate maximum amounts described in paragraph (b) of this section may be exceeded by 20 percent if the student is engaged in a program of study abroad that is approved for credit by the home institution at which the student is enrolled and that has reasonable costs in excess of the home institution's cost of attendance.
(d) For each student, the maximum annual amounts described in paragraphs (a) and (c) of this section, and the aggregate maximum amounts described in paragraphs (b) and (c) of this section, include any amounts borrowed previously by the student under title IV, part E of the HEA at any institution.
(a) The Secretary may require an institution to reimburse its Fund in an amount equal to that portion of the outstanding balance of—
(1) A loan disbursed by the institution to a borrower in excess of the amount that the borrower was eligible to receive, as determined on the basis of information the institution had, or should have had, at the time of disbursement; or
(2) Except as provided in paragraph (b) of this section, a defaulted loan with regard to which the institution failed—
(i) To record or retain the loan note in accordance with the requirements of this part;
(ii) To record advances on the loan note in accordance with the requirements of this part; or
(iii) To exercise due diligence in collecting in accordance with the requirements of this part.
(b) The Secretary does not require an institution to reimburse its Fund for the portion of the outstanding balance of a defaulted loan described in paragraph (a)(2) of this section—
(1) That the institution—
(i) Recovers from the borrower or endorser; or
(ii) Demonstrates, to the Secretary's satisfaction, would not have been collected from the borrower even if the institution complied in a timely manner with the due diligence requirements of subpart C of this part; or
(2) On which the institution obtains a judgment.
(c) An institution that is required to reimburse its Fund under paragraph (a) of this section shall also reimburse the Fund for the amount of the administrative cost allowance claimed by the institution for that portion of the loans to be reimbursed.
(d) An institution that reimburses its Fund under paragraph (a) of this section thereby acquires for its own account all the right, title and interest of the Fund in the loan for which reimbursement has been made.
(a)(1) Before an institution makes its first disbursement to a student, the student shall sign the promissory note and the institution shall provide the student with the following information:
(i) The name of the institution and the address to which communications and payments should be sent.
(ii) The principal amount of the loan and a statement that the institution will report the amount of the loan to a national credit bureau at least annually.
(iii) The stated interest rate on the loan.
(iv) The yearly and cumulative maximum amounts that may be borrowed.
(v) An explanation of when repayment of the loan will begin and when the borrower will be obligated to pay interest that accrues on the loan.
(vi) The minimum and maximum repayment terms which the institution may impose and the minimum monthly repayment required.
(vii) A statement of the total cumulative balance owed by the student to that institution, and an estimate of the monthly payment amount needed to repay that balance.
(viii) Special options the borrowers may have for loan consolidation or other refinancing of the loan.
(ix) The borrower's right to prepay all or part of the loan, at any time, without penalty, and a summary of the circumstances in which repayment of the loan or interest that accrues on the loan may be deferred or canceled including a brief notice of the Department of Defense program for repayment of loans on the basis of specified military service.
(x) A definition of default and the consequences to the borrower, including a statement that the institution may report the default to a national credit bureau.
(xi) The effect of accepting the loan on the eligibility of the borrower for other forms of student assistance.
(xii) The amount of any charges collected by the institution at or prior to the disbursement of the loan and any deduction of such charges from the proceeds of the loan or paid separately by the borrower.
(xiii) Any cost that may be assessed on the borrower in the collection of the loan including late charges and collection and litigation costs.
(2) The institution shall provide the information in paragraph (a)(1) of this section to the borrower in writing—
(i) As part of the written application material;
(ii) As part of the promissory note; or
(iii) On a separate written form.
(b)(1) Except as provided in paragraphs (c) and (f) of this section, an institution shall advance in each payment period a portion of a loan awarded for a full academic year.
(2) The institution shall determine the amount advanced each payment period by the following fraction:
(3) An institution may advance funds, within each payment period, at such time and in such amounts as it determines best meets the student's needs.
(c) If a student incurs uneven costs or resources during an academic year and needs additional funds in a particular payment period, the institution may advance loan funds to the student for those uneven costs.
(d)(1) The institution shall disburse funds to a student or the student's account in accordance with 34 CFR 668.164.
(2) The institution shall ensure that each loan is supported by a legally enforceable promissory note as proof of the borrower's indebtedness.
(3) If the institution uses a Master Promissory Note (MPN), the institution's ability to make additional loans based on that MPN will automatically expire upon the earliest of—
(i) The date the institution receives written notification from the borrower requesting that the MPN no longer be used as the basis for additional loans;
(ii) Twelve months after the date the borrower signed the MPN if no disbursements are made by the institution under that MPN; or
(iii) Ten years from the date the borrower signed the MPN or the date the institution receives the MPN, except that a remaining portion of a loan may be disbursed after this date.
(e) The institution shall advance funds to a student in accordance with the provisions of § 668.164.
(f)(1) The institution shall return to the Fund any amount advanced to a student who, before the first day of classes—
(i) Officially or unofficially withdraws; or
(ii) Is expelled.
(2) A student who does not begin class attendance is deemed to have withdrawn.
(g) Only one advance is necessary if the total amount the institution awards a student for an academic year under the Federal Perkins Loan program is less than $501.
(h) An institutional official may not, without prior approval from the Secretary, obtain a student's power of attorney to endorse any check used to disburse loan funds.
(i)(1) An institution must report to at least one national credit bureau—
(i) The amount and the date of each disbursement;
(ii) Information concerning the repayment and collection of the loan until the loan is paid in full; and
(iii) The date the loan was repaid, canceled, or discharged for any reason.
(2) An institution must promptly report any changes to information previously reported on a loan to the same credit bureaus to which the information was previously reported.
(a) If an institution responsible for a Federal Perkins Loan fund closes or no longer wants to participate in the program, the Secretary directs the institution to take one of the following steps to protect the outstanding loans and the Federal interest in that Fund:
(1) A capital distribution of the liquid assets of the Fund according to section 466(c) of the Act.
(2) The assignment of the outstanding loans to the United States.
(b) An institution that assigns outstanding loans under this paragraph relinquishes its interest in those loans.
(a)
(b)
(2) An institution may transfer up to the total of the sum of its initial and supplemental Federal Perkins Loan allocations for an award year to the Work-Colleges program.
(3) An institution shall use transferred funds according to the requirements of the program to which they are transferred.
(4) An institution shall report any transferred funds on the Fiscal Operations Report required under § 674.19(d).
(5) An institution shall transfer back to the Federal Perkins Loan program any funds unexpended at the end of the award year that it transferred to the FWS program, the FSEOG program, or the Work-Colleges program from the Federal Perkins Loan program.
(a)
(2)(i) A separate bank account for Federal funds is not required, except as provided in paragraph (b) of this section.
(ii) An institution shall notify any bank in which it deposits Federal funds of the accounts into which those funds are deposited by—
(A) Ensuring that the name of the account clearly discloses the fact that Federal funds are deposited in the account; or
(B) Notifying the bank, in writing, of the names of the accounts in which it deposits Federal funds. The institution shall retain a copy of this notice in its files.
(3)(i) The institution shall ensure that the cash balances of the accounts into which it deposits Federal Perkins Loan Fund cash assets do not fall below the amount of Fund cash assets deposited in those accounts but not yet expended on authorized purposes in accordance with applicable title IV HEA program requirements, as determined from the records of the institution.
(ii) If the cash balances of the accounts at any time fall below the amount described in paragraph (a)(3)(i) of this section, the institution is deemed to make any subsequent deposits into the accounts of funds derived from other sources with the intent to restore to that amount those Fund assets previously withdrawn from those accounts. To the extent that these institutional deposits restore the amount previously withdrawn, they are deemed to be Fund assets.
(b)
(c)
(d)
(2) Each year an institution shall submit a Fiscal Operations Report plus other information the Secretary requires. The institution shall insure that the information reported is accurate and shall submit it on the form and at the time specified by the Secretary.
(e)
(2)
(ii) The history must also show the date, nature, and result of each contact with the borrower in the collection of an overdue loan. The institution shall include in the repayment history copies of all correspondence to or from the borrower, except bills, routine overdue notices, and routine form letters.
(3)
(4)
(i) An institution shall keep the original paper promissory note or original paper Master Promissory Note (MPN) and repayment schedules in a locked, fireproof container.
(ii) If a promissory note was signed electronically, the institution must store it electronically and the promissory note must be retrievable in a coherent format.
(iii) After the loan obligation is satisfied, the institution shall return the original or a true and exact copy of the note marked “paid in full” to the borrower, or otherwise notify the borrower in writing that the loan is paid in full, and retain a copy for the prescribed period.
(iv) An institution shall maintain separately its records pertaining to cancellations of Defense, NDSL, and Federal Perkins Loans.
(v) Only authorized personnel may have access to the loan documents.
(a) In making a loan, an institution shall comply with the equal credit opportunity requirements of Regulation B (12 CFR part 202).
(b) The Secretary considers the Federal Perkins Loan program to be a credit assistance program authorized by Federal law for the benefit of an economically disadvantaged class of persons within the meaning of 12 CFR 202.8(a)(1). Therefore, the institution may request a loan applicant to disclose his or her marital status, income from alimony, child support, and spouse's income and signature.
(a)
(2)(i) The institution shall print the note on one page, front and back; or
(ii) The institution may print the note on more than one page if—
(A) The note requires the signature of the borrower on each page; or
(B) Each page of the note contains both the total number of pages in the complete note as well as the number of each page, e.g., page 1 of 4, page 2 of 4, etc.
(iii) The promissory note must state the exact amount of the minimum monthly repayment amount if the institution chooses the option under § 674.33(b).
(b)
(i) The rate of interest on the loan is 5 percent per annum on the unpaid balance; and
(ii) No interest shall accrue before the repayment period begins, during certain deferment periods as provided by this subpart, or during the grace period following those deferments.
(2)
(A) For NDSLs made on or after October 1, 1980, begins 6 months after the borrower ceases to be at least a half-time regular student at an institution of higher education or a comparable institution outside the U.S. approved for this purpose by the Secretary, and normally ends 10 years later;
(B) For NDSLs made before October 1, 1980 and Federal Perkins Loans, begins 9 months after the borrower ceases to be at least a half-time regular student at an institution of higher education or a comparable institution outside the U.S. approved for this purpose by the Secretary, and normally ends 10 years later;
(C) For purposes of establishing the beginning of the repayment period for NDSL or Perkins loans, the 6- and 9-month grace periods referenced in paragraph (b)(2)(i) of this section exclude any period during which a borrower who is a member of a reserve component of the Armed Forces named in section 10101 of Title 10, United States Code is called or ordered to active duty for a period of more than 30 days. Any single excluded period may not exceed three years and includes the time necessary for the borrower to resume enrollment at the next available regular enrollment period. Any Direct or Perkins loan borrower who is in a grace period when called or ordered to active duty as specified in this paragraph is entitled to a new 6- or 9-month grace period upon completion of the excluded period.
(D) May begin earlier at the borrower's request; and
(E) May vary because of minimum monthly repayments (see § 674.33(b)), extensions of repayment (see § 674.33(c)), forbearance (see § 674.33(d)), or deferments (see §§ 674.34, 674.35, and 674.36);
(ii) The promissory note must state that the borrower shall repay the loan—
(A) In equal quarterly, bimonthly, or monthly amounts, as the institution chooses; or
(B) In graduated installments if the borrower requests a graduated repayment schedule, the institution submits the schedule to the Secretary for approval, and the Secretary approves it.
(3)
(4)
(i) The borrower may prepay all or part of the loan at any time without penalty;
(ii) The institution shall use amounts repaid during the academic year in which the loan was made to reduce the original loan amount and not consider these amounts to be prepayments;
(iii) If the borrower repays amounts during the academic year in which the loan was made and the initial grace period ended, only those amounts in excess of the amount due for any repayment period shall be treated as prepayments; and
(iv) If, in an academic year other than that described in paragraph (b)(4)(iii) of this section, a borrower repays more than the amount due for any repayment period, the institution shall use the excess to prepay the principal
(5)
(A) Repay all or part of a scheduled repayment when due; or
(B) File a timely request for cancellation or deferment with the institution. This request must include sufficient evidence to enable the institution to determine whether the borrower is entitled to a cancellation or deferment.
(ii)(A) The amount of the late charge on a Federal Perkins Loan or an NDSL Loan made to cover the cost of attendance for a period of enrollment that began on or after January 1, 1986 must be determined in accordance with § 674.43(b) (2), (3) and (4).
(B) The amount of the late or penalty charge on an NDSL made for periods of enrollment that began before January 1, 1986 may be—
(
(
(
(iii) The institution may—
(A) Add either the penalty or late charge to the principal the day after the scheduled repayment was due; or
(B) Include it with the next scheduled repayment after the borrower receives notice of the late charge.
(6)
(7)
(i) The United States or an institution approved by the Secretary; or
(ii) An institution to which the borrower has transferred if that institution is participating in the Federal Perkins Loan program.
(8)
(i) Make a scheduled repayment on time; or
(ii) File cancellation or deferment form(s) with the institution on time.
(9)
(10)
(i) The institution must disclose to at least one national credit bureau the amount of the loan made to the borrower, along with other relevant information.
(ii) If the borrower defaults on the loan, the institution shall disclose that the borrower has defaulted on the loan, along with other relevant information, to the same national credit bureau to which it originally reported the loan; and
(iii) If the borrower defaults on the loan and the loan is assigned to the Secretary for collection, the Secretary may disclose to a national credit bureau that the borrower has defaulted on the loan, along with other relevant information.
(a) The promissory note used with regard to loans to borrowers enrolled on a less than half-time basis must state that the repayment period begins—
(1) On the date of the next scheduled installment payment on any outstanding loan to the borrower; or
(2) If the borrower has no outstanding loan, at the earlier of—
(i) Nine months from the date the loan was made, or
(ii) The end of a nine-month period that includes the date the loan was
(b) The note must otherwise conform to the provisions of § 674.31.
(a)
(2) If the last scheduled payment would be $25 or less the institution may combine it with the next-to-last repayment.
(3) If the installment payment for all loans made to a borrower by an institution is not a multiple of $5, the institution may round that payment to the next highest dollar amount that is a multiple of $5.
(4) The institution shall apply any payment on a loan in the following order:
(i) Collection costs.
(ii) Late charges.
(iii) Accrued interest.
(iv) Principal.
(b)
(A) The promissory note includes a minimum monthly repayment provision specifying the amount of the minimum monthly repayment; and
(B) The monthly repayment of principal and interest for a 10-year repayment period is less than the minimum monthly repayment; or
(ii) An institution may require a borrower to pay a minimum monthly repayment if the borrower has received loans with different interest rates at the same institution and the total monthly repayment would otherwise be less than the minimum monthly repayment.
(2)
(i) If the total of the monthly repayments is equal to at least the minimum monthly repayment, no institution may exercise a minimum monthly repayment option.
(ii) If only one institution exercises the minimum monthly repayment option when the monthly repayment would otherwise be less than the minimum repayment option, that institution receives the difference between the minimum monthly repayment and the repayment owed to the other institution.
(iii) If each institution exercises the minimum repayment option, the minimum monthly repayment must be divided among the institutions in proportion to the amount of principal advanced by each institution.
(3)
(4)
(5)
(i) It determines that the borrower is unable to make the scheduled repayments due to hardship (see § 674.33(c)); and
(ii) The borrower's scheduled repayment is the minimum monthly repayment described in paragraph (b) of this section.
(6)
(i) $15 for a Defense loan;
(ii) $30 for an NDSL Loan or for a Federal Perkins loan made before October 1, 1992, or for a Federal Perkins loan made on or after October 1, 1992, to a borrower who, on the date the loan is made, has an outstanding balance of principal or interest owing on any loan made under this part; or
(iii) $40 for a Federal Perkins loan made on or after October 1, 1992, to a borrower who, on the date the loan is made, has no outstanding balance of principal or interest owing on any loan made under this part.
(7) The institution shall determine the minimum repayment amount under paragraph (b) of this section for loans with repayment installment intervals greater than one month by multiplying the amounts in paragraph (b) of this section by the number of months in the installment interval.
(c)
(2)
(A) For an unmarried borrower without dependents, an individual whose total income for the preceding calendar year did not exceed 45 percent of the Income Protection Allowance for the current award year for a family of four with one in college.
(B) For a borrower with a family that includes the borrower and any spouse or legal dependents, an individual whose total family income for the preceding calendar year did not exceed 125 percent of the Income Protection Allowance for the current award year for a family with one in college and equal in size to that of the borrower's family.
(ii) The institution shall use the Income Protection Allowance published annually in accordance with section 478 of the HEA in making this determination.
(iii) The institution shall review the borrower's status annually to determine whether the borrower continues to qualify for an extended repayment period based on his or her status as a “low-income individual.”
(iv) Upon determining that a borrower ceases to qualify for an extended repayment period under this section, the institution shall amend the borrower's repayment schedule. The term of the amended repayment schedule may not exceed the number of months remaining on the original repayment schedule, provided that the institution may not include the time elapsed during any extension of the repayment period granted under this section in determining the number of months remaining on the original repayment schedule.
(3) Interest continues to accrue during any extension of a repayment period.
(d)
(2) Upon receipt of a written request and supporting documentation, the institution shall grant the borrower forbearance of principal and, unless otherwise indicated by the borrower, interest renewable at intervals of up to 12 months for periods that collectively do not exceed three years.
(3) The terms of forbearance must be agreed upon, in writing, by the borrower and the institution.
(4) In granting a forbearance under this section, an institution shall grant a temporary cessation of payments, unless the borrower chooses another form
(5) An institution shall grant forbearance if—
(i) The amount of the payments the borrower is obligated to make on title IV loans each month (or a proportional share if the payments are due less frequently than monthly) is collectively equal to or greater than 20 percent of the borrower's total monthly gross income;
(ii) The institution determines that the borrower should qualify for the forbearance due to poor health or for other acceptable reasons; or
(iii) The Secretary authorizes a period of forbearance due to a national military mobilization or other national emergency.
(6) Before granting a forbearance to a borrower under paragraph (d)(5)(i) of this section, the institution shall require the borrower to submit at least the following documentation:
(i) Evidence showing the amount of the most recent total monthly gross income received by the borrower; and
(ii) Evidence showing the amount of the monthly payments owed by the borrower for the most recent month for the borrower's title IV loans.
(7) Interest accrues during any period of forbearance.
(8) The institution may not include the periods of forbearance described in this paragraph in determining the 10-year repayment period.
(e)
(i) The institution has fully complied with all due diligence requirements specified in subpart C of this part; and
(ii) The student borrower pays in a single lump-sum payment—
(A) 90 percent of the outstanding principal balance on the loan under this part;
(B) The interest due on the loan; and
(C) Any collection fees due on the loan.
(2) The Federal share of the compromise repayment must bear the same relation to the institution's share of the compromise repayment as the Federal capital contribution to the institution's loan Fund under this part bears to the institution's capital contribution to the Fund.
(f)(1)
(i) A reduction of no more than one percent of the interest rate on a loan on which the borrower has made 48 consecutive, monthly repayments.
(ii) A discount of no more than five percent on the balance owed on a loan which the borrower pays in full prior to the end of the repayment period.
(iii) With the Secretary's approval, any other incentive the institution determines will reduce defaults and replenish its Fund.
(2)
(ii) An institution may not use Federal funds, including Federal funds from the student loan fund, or institutional funds from the student loan fund to pay for any repayment incentive authorized by this section.
(g)
(ii) For the purposes of this section—
(A) A school's closure date is the date that the school ceases to provide educational instruction in all programs, as determined by the Secretary;
(B) “School” means a school's main campus or any location or branch of the main campus; and
(C) The “holder” means the Secretary or the school that holds the loan.
(2)
(ii) The discharge of a loan under this section qualifies the borrower for reimbursement of amounts paid voluntarily or through enforced collection on the loan.
(iii) A borrower who has defaulted on a loan discharged under this section is not considered to have been in default on the loan after discharge, and such a borrower is eligible to receive assistance under programs authorized by title IV of the HEA.
(iv) The Secretary or the school, if the school holds the loan, reports the discharge of a loan under this section to all credit bureaus to which the status of the loan was previously reported.
(3)
(i) The borrower qualified for and received a discharge on a loan pursuant to 34 CFR 682.402(d) (Federal Family Education Loan Program) or 34 CFR 685.213 (Federal Direct Loan Program), and was unable to receive a discharge on an NDSL or Federal Perkins Loan because the Secretary lacked the statutory authority to discharge the loan; or
(ii) Based on information in the Secretary's possession, the borrower qualifies for a discharge.
(4)
(i) State that the borrower—
(A) Received the proceeds of a loan to attend a school;
(B) Did not complete the program of study at that school because the school closed while the student was enrolled, or the student withdrew from the school not more than 90 days before the school closed (or longer in exceptional circumstances); and
(C) Did not complete and is not in the process of completing the program of study through a teachout at another school as defined in 34 CFR 602.2 and administered in accordance with 34 CFR 602.207(b)(6), by transferring academic credit earned at the closed school to another school, or by any other comparable means;
(ii) State whether the borrower has made a claim with respect to the school's closing with any third party, such as the holder of a performance bond or a tuition recovery program, and, if so, the amount of any payment received by the borrower or credited to the borrower's loan obligation; and
(iii) State that the borrower—
(A) Agrees to provide to the holder of the loan upon request other documentation reasonably available to the borrower that demonstrates that the borrower meets the qualifications for discharge under this section; and
(B) Agrees to cooperate with the Secretary in enforcement actions in accordance with paragraph (g)(6) of this section and to transfer any right to recovery against a third party to the Secretary in accordance with paragraph (g)(7) of this section.
(5)
(6)
(A) Provide testimony regarding any representation made by the borrower to support a request for discharge;
(B) Provide any documents reasonably available to the borrower with respect to those representations; and
(C) If required by the Secretary, provide a sworn statement regarding those documents and representations.
(ii) The holder denies the request for a discharge or revokes the discharge of a borrower who—
(A) Fails to provide the testimony, documents, or a sworn statement required under paragraph (g)(6)(i) of this section; or
(B) Provides testimony, documents, or a sworn statement that does not support the material representations made by the borrower to obtain the discharge.
(7)
(ii) The provisions of this section apply notwithstanding any provision of State law that would otherwise restrict transfer of those rights by the borrower, limit or prevent a transferee from exercising those rights, or establish procedures or a scheme of distribution that would prejudice the Secretary's ability to recover on those rights.
(iii) Nothing in this section limits or forecloses the borrower's right to pursue legal and equitable relief regarding disputes arising from matters unrelated to the discharged NDSL or Federal Perkins Loan.
(8)
(ii) If the borrower's current address is known, the holder of the loan mails the borrower a discharge application and an explanation of the qualifications and procedures for obtaining a discharge. The holder of the loan also promptly suspends any efforts to collect from the borrower on any affected loan. The holder of the loan may continue to receive borrower payments.
(iii) In the case of a loan held by the Secretary, if the borrower's current address is unknown, the Secretary attempts to locate the borrower and determine the borrower's potential eligibility for a discharge under this section by consulting with representatives of the closed school or representatives of the closed school's third-party billing and collection servicers, the school's licensing agency, the school accrediting agency, and other appropriate parties. If the Secretary learns the new address of a borrower, the Secretary mails to the borrower a discharge application and explanation and suspends collection, as described in paragraph (g)(8)(ii) of this section.
(iv) In the case of a loan held by a school, if the borrower's current address is unknown, the school attempts to locate the borrower and determine the borrower's potential eligibility for a discharge under this section by taking steps required to locate the borrower under § 674.44.
(v) If the borrower fails to submit the written request and sworn statement described in paragraph (g)(4) of this section within 60 days of the holder of the loan's mailing the discharge application, the holder of the loan resumes collection and grants forbearance of principal and interest for the period during which collection activity was suspended.
(vi) If the holder of the loan determines that a borrower who requests a discharge meets the qualifications for a discharge, the holder of the loan notifies the borrower in writing of that determination.
(vii) In the case of a loan held by the Secretary, if the Secretary determines that a borrower who requests a discharge does not meet the qualifications for a discharge, the Secretary notifies
(viii) In the case of a loan held by a school, if the school determines that a borrower who requests a discharge does not meet the qualifications for discharge, the school submits that determination and all supporting materials to the Secretary for approval. The Secretary reviews the materials, makes an independent determination, and notifies the borrower in writing of the determination and the reasons for the determination.
(ix) In the case of a loan held by a school and discharged by either the school or the Secretary, the school must reimburse its Fund for the entire amount of any outstanding principal and interest on the loan, and any collection costs charged to the Fund as a result of collection efforts on a discharged loan. The school must also reimburse the borrower for any amount of principal, interest, late charges or collection costs the borrower paid on a loan discharged under this section.
(a) The borrower may defer making a scheduled installment repayment on a Federal Perkins loan, an NDSL, or a Defense loan, regardless of contrary provisions of the borrower's promissory note and regardless of the date the loan was made, during periods described in this section.
(b)(1) The borrower need not repay principal, and interest does not accrue, during a period after the commencement or resumption of the repayment period on a loan, when the borrower is—
(i) Enrolled and in attendance as a regular student in at least a half-time course of study at an eligible institution;
(ii) Enrolled and in attendance as a regular student in a course of study that is part of a graduate fellowship program approved by the Secretary;
(iii) Engaged in graduate or post-graduate fellowship-supported study (such as a Fulbright grant) outside the United States; or
(iv) Enrolled in a course of study that is part of a rehabilitation training program for disabled individuals approved by the Secretary as described in paragraph (g) of this section.
(2) No borrower is eligible for a deferment under paragraph (b)(1) of this section while serving in a medical internship or residency program, except for a residency program in dentistry.
(3) The institution of higher education at which the borrower is enrolled does not need to be participating in the Federal Perkins Loan program for the borrower to qualify for a deferment.
(4) If a borrower is attending an institution of higher education as at least a half-time regular student for a full academic year and intends to enroll as at least a half-time regular student in the next academic year, the borrower is entitled to a deferment for 12 months.
(5) If an institution no longer qualifies as an institution of higher education, the borrower's deferment ends on the date the institution ceases to qualify.
(c) The borrower of a Federal Perkins loan, an NDSL, or a Defense loan need not repay principal, and interest does not accrue, for any period during which the borrower is engaged in service described in §§ 674.53, 674.54, 674.55, 674.56, 674.57, 674.58, 674.59, and 674.60.
(d) The borrower need not repay principal, and interest does not accrue, for any period not to exceed 3 years during which the borrower is seeking and unable to find full-time employment.
(e) The borrower need not repay principal, and interest does not accrue, for periods of up to one year at a time (except that a deferment under paragraph (e)(6) of this section may be granted for the lesser of the borrower's full term of service in the Peace Corps or the borrower's remaining period of economic hardship deferment eligibility) that,
(1) Has been granted an economic hardship deferment under either the FDSL or FFEL programs for the period of time for which the borrower has requested an economic hardship deferment for his or her Federal Perkins loan.
(2) Is receiving payment under a Federal or state public assistance program, such as Aid to Families with Dependent Children, Supplemental Security Income, Food Stamps, or state general public assistance.
(3) Is working full-time and earning a total monthly gross income that does not exceed the greater of—
(i) The monthly earnings of an individual earning the minimum wage described in section 6 of the Fair Labor Standards Act of 1938; or
(ii) An amount equal to 100 percent of the poverty line for a family of two, as determined in accordance with section 673(2) of the Community Service Block Grant Act.
(4) Is not receiving total monthly gross income that exceeds twice the amount specified in paragraph (e)(3) of this section and, after deducting an amount equal to the borrower's monthly payments on Federal postsecondary education loans, as determined under paragraph (e)(10) of this section, the remaining amount of that income does not exceed the amount specified in paragraph (e)(3) of this section;
(5) Is working full-time and has a Federal education debt burden as determined under paragraph (e)(10) of this section that equals or exceeds 20 percent of the borrower's total monthly gross income, and the borrower's income minus such burden is less than 220 percent of the amount calculated under paragraph (3) of this section.
(6) Is serving as a volunteer in the Peace Corps.
(7) For a deferment granted under paragraph (e)(4) or (e)(5) of this section, the institution shall require the borrower to submit at least the following documentation to qualify for an initial period of deferment—
(i) Evidence showing the amount of the borrower's most recent total monthly gross income, as defined in section 674.2; and
(ii) Evidence that would enable the institution to determine the amount of the monthly payments that would have been owed by the borrower during the deferment period to other entities for Federal postsecondary education loans in accordance with paragraph (e)(9) of this section.
(8) To qualify for a subsequent period of deferment that begins less than one year after the end of a period of deferment under paragraphs (e)(3), (e)(4), or (e)(5) of this section, the institution shall require the borrower to submit a copy of the borrower's Federal income tax return if the borrower filed a tax return within eight months prior to the date the deferment is requested.
(9) For purposes of paragraphs (e)(3) and (e)(5) of this section, a borrower is considered to be working full-time if the borrower is expected to be employed for at least three consecutive months at 30 hours per week.
(10) In determining a borrower's Federal education debt burden under paragraphs (e)(4) and (e)(5) of this section, the institution shall—
(i) If the Federal postsecondary education loan is scheduled to be repaid in 10 years or less, use the actual monthly payment amount (or a proportional share if the payments are due less frequently than monthly); or
(ii) If the Federal postsecondary education loan is scheduled to be repaid in more than 10 years, use a monthly payment amount (or a proportional share if the payments are due less frequently than monthly) that would have been due on the loan if the loan had been scheduled to be repaid in 10 years.
(f) To qualify for a deferment for study as part of a graduate fellowship program pursuant to paragraph (b)(1)(ii) of this section, a borrower must provide the institution certification that the borrower has been accepted for or is engaged in full-time study in the institution's graduate fellowship program.
(g) To qualify for a deferment for study in a rehabilitation training program, pursuant to paragraph (b)(1)(iv) of this section, the borrower must be receiving, or be scheduled to receive, services under a program designed to rehabilitate disabled individuals and must provide the institution with the following documentation:
(1) A certification from the rehabilitation agency that the borrower is either receiving or scheduled to receive rehabilitation training services from the agency.
(2) A certification from the rehabilitation agency that the rehabilitation program—
(i) Is licensed, approved, certified, or otherwise recognized by one of the following entities as providing rehabilitation training to disabled individuals—
(A) A State agency with responsibility for vocational rehabilitation programs;
(B) A State agency with responsibility for drug abuse treatment programs;
(C) A State agency with responsibility for mental health services programs;
(D) A State agency with responsibility for alcohol abuse treatment programs; or
(E) The Department of Veterans Affairs; and
(ii) Provides or will provide the borrower with rehabilitation services under a written plan that—
(A) Is individualized to meet the borrower's needs;
(B) Specifies the date on which the services to the borrower are expected to end; and
(C) Is structured in a way that requires a substantial commitment by the borrower to his or her rehabilitation. The Secretary considers a substantial commitment by the borrower to be a commitment of time and effort that would normally prevent an individual from engaging in full-time employment either because of the number of hours that must be devoted to rehabilitation or because of the nature of the rehabilitation.
(h) The institution may not include the deferment periods described in paragraphs (b), (c), (d), (e), (f), and (g) of this section and the period described in paragraph (i) of this section in determining the 10-year repayment period.
(i) The borrower need not pay principal and interest does not accrue until six months after completion of any period during which the borrower is in deferment under paragraphs (b), (c), (d), (e), (f), and (g) of this section.
(a) The borrower may defer repayment on a Federal Perkins Loan made before July 1, 1993, during the periods described in this section.
(b)(1) The borrower need not repay principal, and interest does not accrue, during a period after the commencement or resumption of the repayment period on a loan, when the borrower is at least a half-time regular student at—
(i) An institution of higher education; or
(ii) A comparable institution outside the U.S. approved by the Secretary for this purpose.
(2) The institution of higher education does not need to be participating in the Federal Perkins Loan program for the borrower to qualify for a deferment.
(3) If a borrower is attending as at least a half-time regular student for a full academic year and intends to enroll as at least a half-time regular student in the next academic year, the borrower is entitled to deferment for 12 months.
(4) If an institution no longer qualifies as an institution of higher education, the borrower's deferment ends on the date the institution ceases to qualify.
(c) The borrower need not repay principal, and interest does not accrue, for any period not to exceed 3 years during which the borrower is—
(1) A member of the U.S. Army, Navy, Air Force, Marines, or Coast
(2) On full-time active duty as a member of the National Oceanic and Atmospheric Administration Corps;
(3) A Peace Corps volunteer (see § 674.60);
(4) A volunteer under the Domestic Volunteer Service Act of 1973 (ACTION programs) (see § 674.60);
(5) A full-time volunteer in service which the Secretary has determined is comparable to service in the Peace Corps or under the Domestic Volunteer Service Act of 1973 (ACTION programs). The Secretary considers that a borrower is providing comparable service if he or she satisfies the following five criteria:
(i) The borrower serves in an organization that is exempt from taxation under the provisions of section 501(c)(3) of the Internal Revenue Code of 1954.
(ii) The borrower provides service to low-income persons and their communities to assist them in eliminating poverty and poverty-related human, social, and environmental conditions.
(iii) The borrower does not receive compensation that exceeds the rate prescribed under section 6 of the Fair Labor Standards Act of 1938 (the Federal minimum wage), except that the tax-exempt organization may provide health, retirement, and other fringe benefits to the volunteer that are substantially equivalent to the benefits offered to other employees of the organization.
(iv) The borrower, as part of his or her duties, does not give religious instruction, conduct worship service, engage in religious proselytizing, or engage in fundraising to support religious activities.
(v) The borrower has agreed to serve on a full-time basis for a term of at least one year.
(6) Temporarily totally disabled, as established by an affidavit of a qualified physician, or unable to secure gainful employment because the borrower is providing care, such as continuous nursing or other similar services, required by a dependent who is so disabled. As used in this paragraph—
(i) “Temporarily totally disabled”, with regard to the borrower, means the inability by virtue of an injury or illness to attend an eligible institution or to be gainfully employed during a reasonable period of recovery; and
(ii) “Temporarily totally disabled”, with regard to a disabled spouse or other dependent of a borrower, means requiring continuous nursing or other services from the borrower for a period of at least three months because of illness or injury.
(d)(1) The borrower need not repay principal, and interest does not accrue, for a period not to exceed two years during which time the borrower is serving an eligible internship.
(2) An eligible internship is one which—
(i) Requires the borrower to hold at least a baccalaureate degree before beginning the internship; and
(ii)(A) A State licensing agency requires an individual to complete as a prerequisite for certification for professional practice or service; or
(B) Is a part of an internship or residency program leading to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility that offers postgraduate training.
(3) To qualify for an internship deferment as provided in paragraph (d)(2)(ii)(A) of this section, the borrower must provide the institution with the following certifications:
(i) A statement from an official of the appropriate State licensing agency that successful completion of the internship program is a prerequisite for its certification of the individual for professional service or practice.
(ii) A statement from the organization with which the borrower is undertaking the internship program certifying—
(A) That a baccalaureate degree must be attained in order to be admitted into the internship program;
(B) That the borrower has been accepted into its internship program; and
(C) The anticipated dates on which the borrower will begin and complete the program.
(4) To qualify for an internship deferment as provided in paragraph (d)(2)(ii)(B) of this section, the borrower must provide the institution with a statement from an authorized
(i) A baccalaureate degree must be attained in order to be admitted into the internship program;
(ii) The borrower has been accepted into its internship program; and
(iii) The internship or residency program in which the borrower has been accepted leads to a degree or certificate awarded by an institution of higher education, a hospital or a health-care facility that offers postgraduate training.
(e) The borrower need not repay principal, and interest does not accrue, for a period not in excess of six months—
(1) During which the borrower is—
(i) Pregnant, caring for a newborn baby, or caring for a child immediately after placement of the child through adoption; and
(ii) Not attending an eligible institution of higher education or gainfully employed; and
(2) That begins not later than six months after a period in which the borrower was at least a half-time regular student at an eligible institution.
(f) The borrower need not repay principal, and interest does not accrue, for a period not in excess of one year during which the borrower—
(1) Is a mother of preschool age children;
(2) Has just entered or reentered the work force; and
(3) Is being compensated at a rate which is not more than $1.00 over the minimum hourly wage established by section 6 of the Fair Labor Standards Act of 1938.
(g) An institution may defer payments of principal and interest, but interest shall continue to accrue, if the institution determines this is necessary to avoid hardship to the borrower (see § 674.33(c)).
(h) The institution may not include the deferment periods described in paragraphs (b), (c), (d), (e), (f), and (g) of this section and the period described in paragraph (i) of this section when determining the 10-year repayment period.
(i) The borrower need not repay principal, and interest does not accrue, until six months after completion of any period during which the borrower is in deferment under paragraphs (b), (c), (d), (e), and (f) of this section.
(a) The borrower may defer repayment on an NDSL Loan made on or after October 1, 1980, but before July 1, 1993, during the periods described in this section.
(b)(1) The borrower need not repay principal, and interest does not accrue, during a period after the commencement or resumption of the repayment period on a loan, when the borrower is at least a half-time regular student at—
(i) An institution of higher education; or
(ii) A comparable institution outside the U.S. approved by the Secretary for this purpose.
(2) The institution of higher education does not need to be participating in the Federal Perkins Loan program for the borrower to qualify for a deferment.
(3) If a borrower is attending as at least a half-time regular student for a full academic year and intends to enroll as at least a half-time regular student in the next academic year, the borrower is entitled to deferment for 12 months.
(4) If an institution no longer qualifies as an institution of higher education, the borrower's deferment ends on the date the institution ceases to qualify.
(c) The borrower need not repay principal, and interest does not accrue, for a period of up to 3 years during which time the borrower is—
(1) A member of the U.S. Army, Navy, Air Force, Marines, or Coast Guard or an officer in the Commissioned Corps of the U.S. Public Health Service (see § 674.59);
(2) A Peace Corps volunteer (see § 674.60);
(3) A volunteer under the Domestic Volunteer Service Act of 1973 (ACTION programs) (see § 674.60).
(4) A full-time volunteer in service which the Secretary has determined is comparable to service in the Peace Corps or under the Domestic Volunteer Service Act of 1973 (ACTION programs). The Secretary considers that a borrower is providing comparable service if he or she satisfies the following five criteria:
(i) The borrower serves in an organization that is exempt from taxation under the provisions of section 501(c)(3) of the Internal Revenue Code of 1954.
(ii) The borrower provides service to low-income persons and their communities to assist them in eliminating proverty and poverty-related human, social, and environmental conditions.
(iii) The borrower does not receive compensation that exceeds the rate prescribed under section 6 of the Fair Labor Standards Act of 1938 (the Federal minimum wage), except that the tax-exempt organization may provide health, retirement, and other fringe benefits to the volunteer that are substantially equivalent to the benefits offered to other employees of the organization.
(iv) The borrower, as part of his or her duties, does not give religious instruction, conduct worship service, engage in religious proselytizing, or engage in fundraising to support religious activities.
(v) The borrower has agreed to serve on a full-time basis for a term of at least one year.
(5)(i) Temporarily totally disabled, as established by an affidavit of a qualified physician, or unable to secure gainful employment because the borrower is providing care, such as continuous nursing or other similar services, required by a spouse who is so disabled.
(ii) “Temporarily totally disabled” with regard to the borrower, means the inability by virtue of an injury or illness to attend an eligible institution or to be gainfully employed during a reasonable period of recovery; and
(iii) “Temporarily totally disabled” with regard to a disabled spouse, means requiring continuous nursing or other services from the borrower for a period of at least three months because of illness or injury.
(d)(1) The borrower need not repay principal, and interest does not accrue, for a period not to exceed two years during which time the borrower is serving an eligible internship.
(2) An eligible internship is an internship—
(i) That requires the borrower to hold at least a bachelor's degree before beginning the internship program; and
(ii) That the State licensing agency requires the borrower to complete before certifying the individual for professional practice or service.
(3) To qualify for an internship deferment, the borrower shall provide to the institution the following certifications:
(i) A statement from an official of the appropriate State licensing agency that the internship program meets the provisions of paragraph (d)(2) of this section; and
(ii) A statement from the organization with which the borrower is undertaking the internship program certifying—
(A) The acceptance of the borrower into its internship program; and
(B) The anticipated dates on which the borrower will begin and complete the program.
(e) An institution may defer payments of principal and interest, but interest shall continue to accrue, if the institution determines this is necessary to avoid hardship to the borrower (see § 674.33)(c)).
(f) The institution shall not include the deferment periods described in paragraphs (b), (c), (d), and (e) of this section and the period described in paragraph (g) of this section when determining the 10-year repayment period.
(g) No repayment of principal or interest begins until six months after completion of any period during which the borrower is in deferment under
(a) A borrower may defer repayment—
(1) On an NDSL made before October 1, 1980 during the periods described in paragraphs (b) through (e) of this section; and
(2) On a Defense loan, during the periods described in paragraphs (b) through (f) of this section.
(b)(1) A borrower need not repay principal, and interest does not accrue, during a period after the commencement or resumption of the repayment period on a loan, when the borrower is at least a half-time regular student at—
(i) An institution of higher education; or
(ii) A comparable institution outside the U.S. approved by the Secretary for this purpose.
(2) The institution of higher education does not need to be participating in the Perkins Loan program for the borrower to qualify for a deferment.
(3) If a borrower is attending as at least a half-time regular student for a full academic year and intends to enroll as at least half-time regular student in the next academic year, the borrower is entitled to deferment for 12 months.
(4) If an institution no longer qualifies as an institution of higher education, the borrower's deferment ends on the date the institution ceases to qualify.
(c) A borrower need not repay principal, and interest does not accrue for a period of up to 3 years during which time the borrower is—
(1) A member of the U.S. Army, Navy, Air Force, Marines or Coast Guard (see § 674.59);
(2) A Peace Corps volunteer (see § 674.60); or
(3) A volunteer under the Domestic Volunteer Service Act of 1973 (ACTION programs) (see § 674.60).
(d) The institution shall exclude the deferment periods described in paragraphs (b), (c), and (e) of this section when determining the 10-year repayment period.
(e) An institution may permit the borrower to defer payments of principal and interest, but interest shall continue to accrue, if the institution determines this is necessary to avoid hardship to the borrower (see § 674.33(c)).
(f) The institution may permit the borrower to defer payment of principal and interest, but interest shall continue to accrue, on a Defense loan for a total of 3 years after the commencement or resumption of the repayment period on a loan, during which he or she is attending an institution of higher education as a less-than-half-time regular student.
(a)(1) Except as provided in paragraph (a)(2) of this section, a borrower must request the deferment and provide the institution with all information and documents required by the institution by the date that the institution establishes.
(2) In the case of an in school deferment, the institution may grant the deferment based on student enrollment information showing that a borrower is enrolled as a regular student on at least a half-time basis, if the institution notifies the borrower of the deferment and of the borrower's option to cancel the deferment and continue paying on the loan.
(3) If the borrower fails to meet the requirements of paragraph (a) (1) of
(b)(1) The institution may grant a deferment to a borrower after it has declared a loan to be a default.
(2) As a condition for a deferment under this paragraph, the institution—
(i) Shall require the borrower to execute a written repayment agreement on the loan; and
(ii) May require the borrower to pay immediately some or all of the amounts previously scheduled to be repaid before the date on which the institution determined that the borrower had demonstrated that grounds for a deferment existed, plus late charges and collection costs.
(c) If the information supplied by the borrower demonstrates that for some or all of the period for which a deferment is requested, the borrower had retained in-school status or was within the initial grace period on the loan, the institution shall—
(1) Redetermine the date on which the borrower was required to commence repayment on the loan;
(2) Deduct from the loan balance any interest accrued and late charges added before the date on which the repayment period commenced, as determined in paragraph (c)(1) of this section; and
(3) Treat in accordance with paragraph (b) of this section, the request for deferment for any remaining portion of the period for which deferment was requested.
(d) The institution must determine the continued eligibility of a borrower for a deferment at least annually, except that a borrower engaged in service described in §§ 674.34(e)(6), 674.35(c)(3), 674.36(c)(2), 674.37(c)(2), and § 674.60(a)(1) must be granted a deferment for the lesser of the borrower's full term of service in the Peace Corps, or the borrower's remaining period of eligibility for a deferment under § 674.34(e), not to exceed 3 years.
(a) Each institution must establish a loan rehabilitation program for all borrowers for the purpose of rehabilitating defaulted loans made under this part, except for loans for which a judgment has been secured. The institution's loan rehabilitation program must provide that—
(1) A defaulted borrower is notified of the option and consequences of rehabilitating a loan; and
(2) A loan is rehabilitated if the borrower makes an on-time, monthly payment, as determined by the institution, each month for twelve consecutive months and the borrower requests rehabilitation.
(b) Within 30 days of receiving the borrower's last on-time, consecutive, monthly payment, the institution must—
(1) Return the borrower to regular repayment status;
(2) Treat the first payment made under the 12 consecutive payments as the first payment under the 10-year repayment maximum; and
(3) Instruct any credit bureau to which the default was reported to remove the default from the borrower's credit history.
(c) Collection costs on a rehabilitated loan—
(1) If charged to the borrower, may not exceed 24 percent of the unpaid principal and accrued interest as of the date following application of the twelfth payment;
(2) That exceed the amounts specified in paragraph (c)(1) of this section, may be charged to an institution's Fund until July 1, 2002 in accordance with § 674.47(e)(5); and
(3) Are not restricted to 24 percent in the event the borrower defaults on the rehabilitated loan.
(d) After rehabilitating a defaulted loan and returning to regular repayment status, the borrower regains the balance of the benefits and privileges of the promissory note as applied prior to the borrower's default on the loan. Nothing in this paragraph prohibits an institution from offering the borrower flexible repayment options following the borrower's return to regular repayment status on a rehabilitated loan.
(e) The borrower may rehabilitate a defaulted loan only one time.
(a) An institution may not exercise the minimum monthly repayment provisions on a note when the borrower has received a partial cancellation for the period covered by a postponement.
(b) If a borrower has received Defense, NDSL, and Perkins loans and only one can be cancelled, the amount due on the uncancelled loan is the amount established in § 674.31(b) (2), loan repayment terms; § 674.33(b), minimum repayment rates; or § 674.33(c), extension of repayment period.
(a)
(1) Keep the borrower informed, on a timely basis, of all changes in the program that affect his or her rights or responsibilities; and
(2) Respond promptly to all inquiries from the borrower.
(3) Provide the borrower with information on the availability of the Student Loan Ombudsman's office if the borrower disputes the terms of the loan in writing and the institution does not resolve the dispute.
(b)
(1) The enrollment status of the borrower;
(2) The expected graduation or termination date of the borrower;
(3) The date the borrower withdraws, is expelled or ceases enrollment on at least a half-time basis; and
(4) The current name, address, telephone number and Social Security number of the borrower.
(a)
(1) The name and address of the institution to which the debt is owed and the name and address of the official or servicing agent to whom communications should be sent.
(2) The name and address of the party to which payments should be sent.
(3) The estimated balance owed by the borrower on the date on which the repayment period is scheduled to begin.
(4) The stated interest rate on the loan.
(5) The repayment schedule for all loans covered by the disclosure including the date the first installment payment is due, and the number, amount, and frequency of required payments.
(6) An explanation of any special options the borrower may have for loan
(7) A description of the charges imposed for failure of the borrower to pay all or part of an installment when due.
(8) A description of any charges that may be imposed as a consequence of default, such as liability for expenses reasonably incurred in attempts by the Secretary or the institution to collect on the loan.
(9) The total interest charges which the borrower will pay on the loan pursuant to the projected repayment schedule.
(10) The contact information of a party who, upon request of the borrower, will provide the borrower with a copy of his or her signed promissory note.
(11) An explanation that if a borrower is required to make minimum monthly repayments, and the borrower has received loans from more than one institution, the borrower must notify the institution if he or she wants the minimum monthly payment determination to be based on payments due to other institutions.
(b)
(2) The exit counseling must—
(i) Inform the student as to the average anticipated monthly repayment amount based on the student's indebtedness or on the average indebtedness of students who have obtained Perkins loans for attendance at the institution or in the borrower's program of study;
(ii) Review for the borrower available repayment options (
(iii) Suggest to the borrower debt-management strategies that would facilitate repayment;
(iv) Emphasize to the borrower the seriousness and importance of the repayment obligation the borrower is assuming;
(v) Describe the likely consequences of default, including adverse credit reports and litigation;
(vi) Emphasize that the borrower is obligated to repay the full amount of the loan even if the borrower has not completed the program, is unable to obtain employment upon completion, or is otherwise dissatisfied with or does not receive the educational or other services that the borrower purchased from the institution;
(vii) Review for the borrower the conditions under which the borrower may defer repayment or obtain partial cancellation of a loan;
(viii) Require the borrower to provide current information concerning name, address, social security number, references, and driver's license number, the borrower's expected permanent address, the address of the borrower's next of kin, as well as the name and address of the borrower's expected employer;
(ix) Review for the borrower information on the availability of the Student Loan Ombudsman's office; and
(x) Inform the borrower of the availability of title IV loan information in the National Student Loan Data System (NSLDS).
(3) If exit counseling is conducted through interactive electronic means, the institution must take reasonable
(4) The institution must maintain documentation substantiating the institution's compliance with this section for each borrower.
(c)
(ii) For loans with a six-month initial or post deferment grace period (loans not described in paragraph (b)(1)(i) of this section), the institution shall contact the borrower twice during the grace period.
(2)(i) The institution shall contact the borrower for the first time 90 days after the commencement of any grace period. The institution shall at this time remind the borrower of his or her responsibility to comply with the terms of the loan and shall send the borrower the following information:
(A) The total amount remaining outstanding on the loan account, including principal and interest accruing over the remaining life of the loan.
(B) The date and amount of the next required payment.
(ii) The institution shall contact the borrower the second time 150 days after the commencement of any grace period. The institution shall at this time notify the borrower of the date and amount of the first required payment.
(iii) The institution shall contact a borrower with a nine-month initial grace period a third time 240 days after the commencement of the grace period, and shall then inform him or her of the date and amount of the first required payment.
(a) The term
(1) If the institution uses a coupon payment system, it shall send the coupons to the borrower at least 30 days before the first payment is due.
(2) If the institution does not use a coupon system, it shall send to the borrower—
(i) A written notice giving the name and address of the party to which payments are to be sent and a statement of account at least 30 days before the first payment is due; and
(ii) A statement of account at least 15 days before the due date of each subsequent payment.
(3) Notwithstanding paragraph (a)(2)(ii) of this section, if the borrower elects to make payment by means of an electronic transfer of funds from the borrower's bank account, the institution shall send to the borrower an annual statement of account.
(b)(1) An institution shall send a first overdue notice within 15 days after the due date for a payment if the institution has not received—
(i) A payment:
(ii) A request for deferment; or
(iii) A request for postponement or for cancellation.
(2) Subject to § 674.47(a), the institution may assess a late charge for loans made for periods of enrollment beginning on or after January 1, 1986, during the period in which the institution takes any steps described in this section to secure—
(i) Any part of an installment payment not made when due, or
(ii) A request for deferment, cancellation, or postponement of repayment on the loan that contains sufficient information to enable the institution to determine whether the borrower is entitled to the relief requested.
(3) The institution shall determine the amount of the late charge imposed
(i) Actual costs incurred for actions required under this section to secure the required payment or information from the borrower; or
(ii) The average cost incurred for similar attempts to secure payments or information from other borrowers.
(4) The institution may not require a borrower to pay late charges imposed under paragraph (b)(3) of this section in an amount, for each late payment or request, exceeding 20 percent of the installment payment most recently due.
(5) The institution—
(i) Shall determine the amount of the late or penalty charge imposed on loans not described in paragraph (b)(2) of this section in accordance with § 674.31(b)(5) (See appendix E); and
(ii) May assess this charge only during the period described in paragraph (b)(2) of this section.
(6) The institution shall notify the borrower of the amount of the charge it has imposed, and whether the institution—
(i) Has added that amount to the principal amount of the loan as of the first day on which the installment was due; or
(ii) Demands payment for that amount in full no later than the due date of the next installment.
(c) If the borrower does not satisfactorily respond to the first overdue notice, the institution shall continue to contact the borrower as follows, until the borrower makes satisfactory repayment arrangements or demonstrates entitlement to deferment, postponement, or cancellation:
(1) The institution shall send a second overdue notice within 30 days after the first overdue notice is sent.
(2) The institution shall send a final demand letter within 15 days after the second overdue notice. This letter must inform the borrower that unless the institution receives a payment or a request for deferment, postponement, or cancellation within 30 days of the date of the letter, it will refer the account for collection or litigation, and will report the default to a credit bureau.
(d) Notwithstanding paragraphs (b) and (c) of this section, an institution may send a borrower a final demand letter if the institution has not within 15 days after the due date received a payment, or a request for deferment. postponement, or cancellation, and if—
(1) The borrower's repayment history has been unsatisfactory, e.g., the borrower has previously failed to make payment(s) when due or to request deferment, postponement, or cancellation in a timely manner, or has previously received a final demand letter; or
(2) The institution reasonably concludes that the borrower neither intends to repay the loan nor intends to seek deferment, postponement, or cancellation of the loan.
(e)(1) An institution that accelerates a loan as provided in § 674.31 (i.e., makes the entire outstanding balance of the loan, including accrued interest and any applicable late charges, payable immediately) shall—
(i) Provide the borrower, at least 30 days before the effective date of the acceleration, written notice of its intention to accelerate; and
(ii) Provide the borrower on or after the effective date of acceleration, written notice of the date on which it accelerated the loan and the total amount due on the loan.
(2) The institution may provide these notices by including them in other written notices to the borrower, including the final demand letter.
(f) If the borrower does not respond to the final demand letter within 30 days from the date it was sent, the institution shall attempt to contact the borrower by telephone before beginning collection procedures.
(g)(1) An institution shall ensure that any funds collected as a result of billing the borrower are—
(i) Deposited in interest-bearing bank accounts that are—
(A) Insured by an agency of the Federal Government; or
(B) Secured by collateral of reasonably equivalent value; or
(ii) Invested in low-risk income-producing securities, such as obligations issued or guaranteed by the United States.
(2) An institution shall exercise the level of care required of a fiduciary
(a) If mail, other than unclaimed mail, sent to a borrower is returned undelivered, an institution shall take steps to locate the borrower. These steps must include—
(1) Reviews of records in all appropriate institutional offices;
(2) Reviews of telephone directories or inquiries of information operators in the locale of the borrower's last known address; and
(3) If, after following the procedures in paragraph (a) of this section, an institution is still unable to locate a borrower, the institution may use the Internal Revenue Service skip-tracing service.
(b) If an institution is unable to locate a borrower by the means described in paragraph (a) of this section, it shall—
(1) Use its own personnel to attempt to locate the borrower, employing and documenting efforts comparable to commonly accepted commercial skip-tracing practices; or
(2) Refer the account to a firm that provides commercial skip-tracing services.
(c) If the institution acquires the borrower's address or telephone number through the efforts described in this section, it shall use that new information to continue its efforts to collect on that borrower's account in accordance with the requirements of this subpart.
(d) If the institution is unable to locate the borrower after following the procedures in paragraphs (a) and (b) of this section, the institution shall make reasonable attempts to locate the borrower at least twice a year until—
(1) The loan is recovered through litigation;
(2) The account is assigned to the United States; or
(3) The account is written off under § 674.47(g).
(a) The term “collection procedures,” as used in this subpart, includes that series of more intensive efforts, including litigation as described in § 674.46, to recover amounts owed from defaulted borrowers who do not respond satisfactorily to the demands routinely made as part of the institution's billing procedures. If a borrower does not satisfactorily respond to the final demand letter or the following telephone contact made in accordance with § 674.43(f), the institution shall—
(1) Report the account as being in default to any one national credit bureau; and
(2)(i) Use its own personnel to collect the amount due; or
(ii) Engage a collection firm to collect the account.
(b)(1) An institution must report to any national credit bureau to which it reported the default, according to the reporting procedures of the national credit bureau, any changes to the account status of the loan.
(2) The institution must resolve, within 30 days of its receipt, any inquiry from any credit bureau that disputes the completeness or accuracy of information reported on the loan.
(c)(1) If the institution, or the firm it engages, pursues collection activity for up to 12 months and does not succeed in converting the account to regular repayment status, or the borrower does not qualify for deferment, postponement, or cancellation on the loan, the institution shall—
(i) Litigate in accordance with the procedures in § 674.46;
(ii) Make a second effort to collect the account as follows:
(A) If the institution first attempted to collect the account using its own personnel, it shall refer the account to a collection firm.
(B) If the institution first attempted to collect the account by using a collection firm, it shall either attempt to collect the account using institutional
(iii) Submit the account for assignment to the Secretary in accordance with the procedures set forth in § 674.50.
(2) If the collection firm retained by the institution does not succeed in placing an account into a repayment status described in paragraph (c)(1) of this section after 12 months of collection activity, the institution shall require the collection firm to return the account to the institution.
(d) If the institution is unable to place the loan in repayment as described in paragraph (c)(1) of this section after following the procedures in paragraphs (a), (b), and (c) of this section, the institution shall continue to make annual attempts to collect from the borrower until—
(1) The loan is recovered through litigation;
(2) The account is assigned to the United States; or
(3) The account is written off under § 674.47(g).
(e)(1) Subject to § 674.47(d), the institution shall assess against the borrower all reasonable costs incurred by the institution with regard to a loan obligation.
(2) The institution shall determine the amount of collection costs that shall be charged to the borrower for actions required under this section, and §§ 674.44, 674.46, 674. 48, and 674.49, based on either—
(i) Actual costs incurred for these actions with regard to the individual borrower's loan; or
(ii) Average costs incurred for similar actions taken to collect loans in similar stages of delinquency.
(3) The Fund must be reimbursed for collection costs initially charged to the Fund and subsequently paid by the borrower.
(f)(1) An institution shall ensure that any funds collected from the borrower are—
(i) Deposited in interest-bearing bank accounts that are—
(A) Insured by an agency of the Federal Government; or
(B) Secured by collateral of reasonably equivalent value; or
(ii) Invested in low-risk income-producing securities, such as obligations issued or guaranteed by the United States.
(2) An institution shall exercise the level of care required of a fiduciary with regard to these deposits and investments.
(g)
(h) As part of the collection activities provided for in this section, the institution must provide the borrower with information on the availability of the Student Loan Ombudsman's office.
(a)(1) If the collection efforts described in § 674.45 do not result in the repayment of a loan, the institution shall determine at least once every two years whether—
(i) The total amount owing on the borrower's account, including outstanding principal, accrued interest, collection costs and late charges on all of the borrower's Federal Perkins, NDSL and National Defense Student Loans held by that institution, is more than $500;
(ii) The borrower can be located and served with process;
(iii)(A) The borrower has sufficient assets attachable under State law to satisfy a major portion of the oustanding debt; or
(B) The borrower has income from wages or salary which may be garnished under applicable State law sufficient to satisfy a major portion of the debt over a reasonable period of time;
(iv) The borrower does not have a defense that will bar judgment for the institution; and
(v) The expected cost of litigation, including attorney's fees, does not exceed the amount which can be recovered from the borrower.
(2) The institution shall sue the borrower if it determines that the conditions in paragraph (a)(1) of this section are met.
(3) The institution may sue a borrower in default, even if the conditions in paragraph (a)(1) of this section are not met.
(b) The institution shall assess against and attempt to recover from the borrower—
(1) All litigation costs, including attorney's fees, court costs and other related costs, to the extent permitted under applicable law; and
(2) All prior collection costs incurred and not yet paid by the borrower.
(c)(1) An institution shall ensure that any funds collected as a result of litigation procedures are—
(i) Deposited in interest-bearing bank accounts that are—
(A) Insured by an agency of the Federal Government; or
(B) Secured by collateral of reasonably equivalent value; or
(ii) Invested in low-risk income-producing securities, such as obligations issued or guaranteed by the United States.
(2) An institution shall exercise the level of care required of a fiduciary with regard to these deposits and investments.
(d) If the institution is unable to collect the full amount owing on the loan after following the procedures set forth in §§ 674.41 through 674.46, the institution may—
(1) Submit the account to the Secretary for assignment in accordance with the procedures in § 674.50; or
(2) With the Secretary's approval, refer the account to the Department for collection.
(a)
(2) If the amount recovered from the borrower does not suffice to pay the amount of the past-due payments and the penalty or late charges, the institution may charge the Fund for only that unpaid portion of the cost of telephone calls to the borrower made pursuant to § 674.43 to demand payment of overdue amounts on the loan.
(b)
(2) If the amount recovered from the borrower does not suffice to pay the amount on the past-due payments late charges, and these collection costs, the institution may charge and Fund the unpaid collection costs in accordance with paragraph (e) of this section.
(c)
(d)
(1) The institution may waive the percentage of collection costs applicable to the amount then past-due on a loan equal to the percentage of that past-due balance that the borrower pays within 30 days after the date on which the borrower and the institution enter into a written repayment agreement on the loan.
(2) The institution may waive all collection costs in return for a lump-sum payment of the full amount of principal and interest outstanding on a loan.
(e)
(1) A reasonable amount for the cost of a successful address search required in § 674.44(b).
(2) Costs related to the use of credit bureaus as provided in § 674.45(b)(1).
(3) For first collection efforts pursuant to § 674.45(a)(2), an amount that does not exceed 30 percent of the
(4) For second collection efforts pursuant to § 674.45(c)(1)(ii), an amount that does not exceed 40 percent of the amount of principal, interest and late charges collected.
(5) Until July 1, 2002 on loans rehabilitated pursuant to § 674.39, amounts that exceed the amounts specified in § 674.39(c)(1) but are less than—
(i) 30 percent if the loan was rehabilitated while in a first collection effort; or
(ii) 40 percent if the loan was rehabilitated while in a second collection effort.
(6) For collection costs resulting from litigation, including attorney's fees, an amount that does not exceed the sum of—
(i) Court costs specified in 28 U.S.C. 1920;
(ii) Other costs incurred in bankruptcy proceedings in taking actions required or authorized under § 674.49;
(iii) Costs of other actions in bankruptcy proceedings to the extent that those costs, together with costs described in paragraph (e)(5)(ii) of this section, do not exceed 40 percent of the total amount of judgment obtained on the loan; and
(iv) 40 percent of the total amount recovered from the borrower in any other proceeding.
(7) If a collection firm agrees to perform or obtain the performance of both collection and litigation services on a loan, an amount for both functions that does not exceed the sum of 40 percent of the amount of principal, interest and late charges collected on the loan, plus court costs specified in 28 U.S.C. 1920.
(f)
(g)
(1) The institution has carried out the due diligence procedures described in subpart C of this part with regard to this account; and
(2) For a period of at least 4 years, the borrower has not made a payment on the account, converted the account to regular repayment status, or applied for a deferment, postponement, or cancellation on the account.
(h)
(1) Notwithstanding any other provision of this subpart, an institution may write off an account, including outstanding principal, accrued interest, collection costs, and late charges, with a balance of—
(i) Less than $25; or
(ii) Less than $50 if, for a period of at least 2 years, the borrower has been billed for this balance in accordance with § 674.43(a).
(2) An institution that writes off an account under this paragraph may no longer include the amount of the account as an asset of the Fund.
(3) When the institution writes off an account, the borrower is relieved of all repayment obligations.
(a) The institution is responsible for ensuring compliance with the billing and collection procedures set forth in this subpart. The institution may use employees to perform these duties or may contract with other parties to perform them.
(b) An institution that contracts for performance of any duties under this subpart remains responsible for compliance with the requirements of this subpart in performing these duties, including decisions regarding cancellation, postponement, or deferment of repayment, extension of the repayment period, other billing and collection
(c) If an institution uses a billing service to carry out billing procedures under § 674.43, the institution shall ensure that the service—
(1) Provides at least quarterly, a statement to the institution which shows—
(i) Its activities with regard to each borrower;
(ii) Any changes in the borrower's name, address, telephone number, and, if known, any changes to the borrower's Social Security number; and
(iii) Amounts collected from the borrower;
(2) Provides at least quarterly, a statement to the institution with a listing of its charges for skip-tracing activities and telephone calls;
(3) Does not deduct its fees from the amount is receives from borrowers;
(4)(i) Instructs the borrower to remit payment directly to the institution;
(ii) Instructs the borrower to remit payment to a lock-box maintained for the institution; or
(iii) Deposits those funds received directly from the borrower immediately in an institutional trust account that must be an interest-bearing account if those funds will be held for longer than 45 days; and
(5) Maintains a fidelity bond or comparable insurance in accordance with the requirements in paragraph (f) of this section.
(d) If the institution uses a collection firm, the institution shall ensure that the firm—
(1)(i) Instructs the borrower to remit payment directly to the institution;
(ii) Instructs the borrower to remit payment to a lockbox maintained for the institution; or
(iii) Deposits those funds received directly from the borrower immediately in an institutional trust account that must be an interest-bearing account if those funds will be held for longer than 45 days, after deducting its fees if authorized to do so by the institution; and
(2) Provides at least quarterly, a statement to the institution which shows—
(i) Its activities with regard to each borrower;
(ii) Any changes in the borrower's name, address, telephone number and, if known, any changes to the borrower's Social Security number;
(iii) Amounts collected from the borrower; and
(3) Maintains a fidelity bond or comparable insurance in accordance with the requirements in paragraph (f) of this section.
(e) If an institution uses a billing service to carry out § 674.43 (billing procedures), it may not use a collection firm that—
(1) Owns or controls the billing service;
(2) Is owned or controlled by the billing service; or
(3) Is owned or controlled by the same corporation, partnership, association, or individual that owns or controls the billing service.
(f)(1) An institution that employs a third party to perform billing or collection services required under this subpart shall ensure that the party has and maintains in effect a fidelity bond or comparable insurance in accordance with the requirements of this paragraph.
(2) If the institution does not authorize the third party to deduct its fees from payments from borrowers, the institution shall ensure that the party is bonded or insured in an amount not less than the amount of funds that the institution reasonably expects to be repaid over a two-month period on accounts it refers to the party.
(3) In the institution authorizes the third party performing collection services to deduct its fees from payments from borrowers, the institution shall ensure that—
(i) If the amount of funds that the institution reasonably expects to be paid over a two-month period on accounts it refers to the party is less than $100,000, the party is bonded or insured in an amount equal to the lesser of—
(A) Ten times the amount of funds that the institution reasonably expects to be repaid over a two-month period on accounts it refers to the party; or
(B) The total amount of funds that the party demonstrates will be repaid
(ii) If the amount of funds that the institution reasonably expects to be repaid over a two-month period on accounts it refers to the party is more than $100,000, the institution shall ensure that the party has and maintains in effect a fidelity bond or comparable insurance—
(A) Naming the institution as beneficiary; and
(B) In an amount not less than the amount of funds reasonably expected to be repaid on accounts referred by the institution to the party during a two-month period.
(4) The institution shall review annually the amount of repayments expected to be made on accounts it refers to a third party for billing or collection services, and shall ensure that the amount of the fidelity bond or insurance coverage maintained continues to meet the requirements of this paragraph.
(a)
(b)
(1) In the case of a proceeding under chapter 7 of the Bankruptcy Code, the notice of meeting of creditors states that the borrower has no assets, or
(2) In the case of a bankruptcy proceeding under either Chapter 7 or Chapter 13 of the Bankruptcy Code in which the repayment plan proposes that the borrower repay less than the full amount owed on the loan, the institution has an authoritative determination by an appropriate State official that in the opinion of the State official, the institution is an agency of the State and is, on that basis, under applicable State law, immune from suit.
(c)
(2) If the petition for relief in bankruptcy was filed before October 8, 1998 and more than seven years of the repayment period on the loan (excluding any applicable suspension of the repayment period defined in 34 CFR 682.402(m)) have passed before the borrower filed the petition, the institution may not oppose a determination of dischargeability requested under 11 U.S.C. 523(a)(8)(B) on the ground of undue hardship.
(3) In any other case, the institution must determine, on the basis of reasonably available information, whether repayment of the loan under either the current repayment schedule or any adjusted schedule authorized under subpart B or D of this part would impose an undue hardship on the borrower and his or her dependents.
(4) If the institution concludes that repayment would not impose an undue hardship, the institution shall determine whether the costs reasonably expected to be incurred to oppose discharge will exceed one-third of the total amount owed on the loan, including principal, interest, late charges and collection costs.
(5) If the expected costs of opposing discharge of such a loan do not exceed one-third of the total amount owed on the loan, the institution shall—
(i) Oppose the borrower's request for a determination of dischargeability; and
(ii) If the borrower is in default on the loan, seek a judgment for the amount owed on the loan.
(6) In opposing a request for a determination of dischargeability, the institution may compromise a portion of the amount owed on the loan if it reasonably determines that the compromise is necessary in order to obtain a judgment on the loan.
(d)
(e)
(2) The institution is not required to respond to a proposed repayment plan, if—
(i) The borrower proposes under the repayment plan to repay all principal, interest, late charges and collection costs on the loan; or
(ii) The repayment plan makes no provision with regard either to the loan obligation or to general unsecured claims.
(3)(i) If the borrower proposes under the repayment plan to repay less than the total amount owed on the loan, the institution shall determine from its own records and court documents—
(A) The amount of the loan obligation dischargeable under the plan by deducting the total payments on the loan proposed under the plan from the total amount owed;
(B) Whether the plan or the classification of the loan obligation under the proposed plan meets the requirements of section 1325 of the Code; and
(C) Whether grounds exist under 11 U.S.C. 1307 to move for conversion or dismissal of the chapter 13 case.
(ii) If the institution reasonably expects that costs of the appropriate actions will not exceed one-third of the dischargeable loan debt, the institution shall—
(A) Object to confirmation of a proposed plan that does not meet the requirements of 11 U.S.C. 1325; and
(B) Move to dismiss or convert a case where grounds can be established under 11 U.S.C. 1307.
(4)(i) The institution must monitor the borrower's compliance with the requirements of the plan confirmed by the court. If the institution determines that the debtor has not made the payments required under the plan, or has filed a request for a “hardship discharge” under 11 U.S.C. 1328(b), the institution must determine from its own records and information derived from documents filed with the court—
(A) Whether grounds exist under 11 U.S.C. 1307 to convert or dismiss the case; and
(B) Whether the borrower has demonstrated entitlement to the “hardship discharge” by meeting the requirements of 11 U.S.C. 1328(b).
(ii) If the institution reasonably expects that costs of the appropriate actions, when added to the costs already incurred in taking actions authorized under this section, will not exceed one-third of the dischargeable loan debt, the institution shall—
(A) Move to dismiss or convert a case where grounds can be established under 11 U.S.C. 1307; or
(B) Oppose the requested discharge where the debtor has not demonstrated that the requirements of 11 U.S.C. 1328(b) are met.
(f)
(1) The borrower's petition for relief in bankruptcy has been dismissed;
(2) The borrower has received a discharge under 11 U.S.C. 727, 11 U.S.C. 1141, or 11 U.S.C. 1228, unless—
(i) The court has found that repayment of the loan would impose an undue hardship on the borrower and the dependents of the borrower; or
(ii)(A) The petition for relief was filed before October 8, 1998;
(B) The loan entered the repayment period more than seven years (excluding any applicable suspension of the repayment period as defined by 34 CFR 682.402(m), and
(C) The loan is not excepted from discharge under other applicable provisions of the Code; or
(3) The borrower has received a discharge under 11 U.S.C. 1328(a) or 1328(b), unless—
(i) The court has found that repayment of the loan would impose an undue hardship on the borrower and the dependents of the borrower; or
(ii)(A) The petition for relief was filed before October 8, 1998;
(B) The loan entered the repayment period more than seven years (excluding any application suspension of the repayment period as defined by 34 CFR 682.402(m) before the filing of the petition; and
(C) The borrower's plan approved in the bankruptcy proceeding made some provision with regard to either the loan obligation or unsecured debts in general.
(g)
(i) In a bankruptcy in which the borrower filed for relief before October 8, 1998, if the loan entered the repayment period more than seven years (exclusive of any applicable suspension of the repayment period defined by 34 CFR 682.402(m)) from the date on which a petition for relief was filed; or
(ii) In any other case, a judgment that repayment of the debt would constitute an undue hardship and that the debt is therefore dischargeable.
(2) If an institution receives a repayment from a borrower after a loan has been discharged, it must deposit that payment in its Fund.
(a) An institution may submit a defaulted loan note to the Secretary for assignment to the United States if—
(1) The institution has been unable to collect on the loan despite complying with the diligence procedures, including at least a first level collection effort as described in § 674.45(a) and litigation, if required under § 674.46(a), to the extent these actions were required by regulations in effect on the date the loan entered default;
(2) The amount of the borrower's account to be assigned, including outstanding principal, accrued interest, collection costs and late charges is $25.00 or greater; and
(3) The loan has been accelerated.
(b) An institution may submit a defaulted note for assignment only during the submission period established by the Secretary.
(c) The Secretary may require an institution to submit the following documents for any loan it proposes to assign—
(1) An assignment form provided by the Secretary and executed by the institution, which must include a certification by the institution that it has complied with the requirements of this subpart, including at least a first level collection effort as described in § 674.45(a) in attempting collection on the loan.
(2) The original promissory note or a certified copy of the original note.
(3) A copy of the repayment schedule.
(4) A certified copy of any judgment order entered on the loan.
(5) A complete statement of the payment history.
(6) Copies of all approved requests for deferment and cancellation.
(7) A copy of the notice to the borrower of the effective date of acceleration and the total amount due on the loan.
(8) Documentation that the institution has withdrawn the loan from any firm that it employed for address search, billing, collection or litigation services, and has notified that firm to cease collection activity on the loans.
(9) Copies of all pleadings filed or received by the institution on behalf of a borrower who has filed a petition in bankruptcy and whose loan obligation is determined to be nondischargeable.
(10) Documentation that the institution has complied with all of the due diligence requirements described in
(d) Except as provided in paragraph (e) of this section, and subject to paragraph (g) of this section, the Secretary accepts an assignment of a note described in paragraph (a) of this section and submitted in accordance with paragraph (c) of this section.
(e) The Secretary does not accept assignment of a loan if—
(1) The institution has not provided the Social Security number of the borrower;
(2) The borrower has received a discharge in bankruptcy, unless—
(i) The bankruptcy court has determined that the loan obligation is nondischargeable and has entered judgment against the borrower; or
(ii) A court of competent jurisdiction has entered judgment against the borrower on the loan after the entry of the discharge order; or
(3) The institution has initiated litigation against the borrower, unless the judgment has been entered against the borrower and assigned to the United States.
(f)(1) The Secretary provides an institution written notice of the acceptance of the assignment of the note. By accepting assignment, the Secretary acquires all rights, title, and interest of the institution in that loan.
(2) The institution shall endorse and forward to the Secretary any payment received from the borrower after the date on which the Secretary accepted the assignment, as noted in the written notice of acceptance.
(g)(1) The Secretary may determine that a loan assigned to the United States is unenforceable in whole or in part because of the acts or omissions of the institution or its agent. The Secretary may make this determination with or without a judicial determination regarding the enforceability of the loan.
(2) The Secretary may require the institution to reimburse the Fund for that portion of the outstanding balance on a loan assigned to the United States which the Secretary determines to be unenforceable because of an act or omission of that institution or its agent.
(3) Upon reimbursement to the Fund by the institution, the Secretary shall transfer all rights, title and interest of the United States in the loan to the institution for its own account.
(h) An institution shall consider a borrower whose loan has been assigned to the United States for collection to be in default on that loan for the purpose of eligibility for title IV financial assistance, until the borrower provides the institution confirmation from the Secretary that he or she has made satisfactory arrangements to repay the loan.
The following definitions apply to this subpart:
(a)
(2) If such a school has a year-round program of instruction, the Secretary considers a minimum of nine consecutive months to be the equivalent of an academic year.
(b)
(1) The equivalent of 2 semesters, 2 trimesters, or 3 quarters at an institution using credit hours; or
(2) At least 900 clock hours of training for each program at an institution using clock hours.
(c)
(d)
(e)
(f)
(1) State law; or
(2) The Secretary, if the school is not in a State.
(g)
(1) Mentally retarded;
(2) Hard of hearing;
(3) Deaf;
(4) Speech and language impaired;
(5) Visually handicapped;
(6) Seriously emotionally disturbed;
(7) Orthopedically impaired;
(8) Specific learning disabled; or
(9) Otherwise health impaired.
(h)
(i)
(j)
(2) Any other public institution or agency having administrative control and direction of a public elementary or secondary school.
(k)
(l)
(m)
(n)
(o)
(i) State law; or
(ii) The Secretary, if the school is not in a State.
(2) However, State laws notwithstanding, secondary education does not include any education beyond grade 12.
(p)
(2) An agency or official designated by the Governor or by State law as being primarily responsible for the State supervision of public elementary and secondary schools.
(q)
(i) Direct classroom teaching;
(ii) Classroom-type teaching in a non-classroom setting; or
(iii) Educational services to students directly related to classroom teaching such as school librarians or school guidance counselors.
(2) A supervisor, administrator, researcher, or curriculum specialist is not a teacher unless he or she primarily provides direct and personal educational services to students.
(3) An individual who provides one of the following services does not qualify as a teacher unless that individual is licensed, certified, or registered by the appropriate State education agency for that area in which he or she is providing related special educational services, and the services provided by the individual are part of the educational curriculum for handicapped children:
(i) Speech and language pathology and audiology;
(ii) Physical therapy;
(iii) Occupational therapy;
(iv) Psychological and counseling services; or
(v) Recreational therapy.
(r)
(s)
(a)
(b)
(ii) An institution may refuse a request for cancellation based on a claim of simultaneous employment as a nurse or medical technician in two or more facilities if it cannot determine easily from the documentation supplied by the borrower that the combined employment is full-time. However, it shall grant the cancellation if one facility official certifies that a nurse or medical technician worked full-time for a full year.
(2) If the borrower is unable due to illness or pregnancy to complete the academic year, the borrower still qualifies for the cancellation if—
(i) The borrower completes the first half of the academic year, and has begun teaching the second half; and
(ii) The borrower's employer considers the borrower to have fulfilled his or her contract for the academic year for purposes of salary increment, tenure, and retirement.
(c)
(2) A borrower whose defaulted loan has been accelerated—
(i) May qualify for a loan cancellation for services performed before the date of acceleration; and
(ii) Cannot qualify for a cancellation for services performed on or after the date of acceleration.
(3) An institution shall grant a request for cancellation on account of the death or disability of the borrower without regard to the repayment status of the loan.
(d)
(2) For loans made on or after July 1, 1993, the Secretary considers a borrower's loan deferment under § 674.34 to run concurrently with any period for which a cancellation under §§ 674.53, 674.56, 674.57, or 674.58 is granted.
(e)
(a)
(1)(i) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins loan or an NDSL made on or after July 23, 1992, for full-time teaching in a public or other nonprofit elementary or secondary school.
(ii) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992, for teaching service performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(2) The borrower must be teaching full-time in a public or other nonprofit elementary or secondary school that—
(i) Is in a school district that qualified for funds, in that year, under title I of the Elementary and Secondary Education Act of 1965, as amended; and
(ii) Has been selected by the Secretary based on a determination that more than 30 percent of the school's total enrollment is made up of title I children.
(3) For each academic year, the Secretary notifies participating institutions of the schools selected under paragraph (a) of this section.
(4) (i) The Secretary selects schools under paragraph (a)(1) of this section based on a ranking by the State education agency.
(ii) The State education agency shall base its ranking of the schools on objective standards and methods. These standards must take into account the numbers and percentages of title I children attending those schools.
(iii) For each academic year, the Secretary notifies participating institutions of the schools selected under paragraph (a) of this section.
(5) The Secretary considers all elementary and secondary schools operated by the Bureau of Indian Affairs (BIA) or operated on Indian reservations by Indian tribal groups under contract with BIA to qualify as schools serving low-income students.
(6) A teacher, who performs service in a school that meets the requirement of paragraph (a)(1) of this section in any year and in a subsequent year fails to meet these requirements, may continue to teach in that school and will be eligible for loan cancellation pursuant to paragraph (a) of this section in subsequent years.
(7) If a list of eligible institutions in which a teacher performs services under paragraph (a)(1) of this section is not available before May 1 of any year, the Secretary may use the list for the year preceding the year for which the determination is made to make the service determination.
(b)
(2) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992, for teaching service performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(c)
(2) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992, for teaching service performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(d)
(2) Cancellation rates are—
(i) 15 percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the first and second years of full-time teaching;
(ii) 20 percent of the original principal loan amount, plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the third and fourth years of full-time teaching; and
(iii) 30 percent of the original principal loan amount, plus the interest on the unpaid balance accruing during the year of qualifying service, for the fifth year of full-time teaching.
(e)
(f)
(a)
(i) A public or other nonprofit elementary or secondary school;
(ii) An institution of higher education; or
(iii) An overseas Department of Defense elementary or secondary school.
(2) The cancellation rate is 10 percent of the original principal loan amount, plus the interest on the unpaid balance accruing during the year of qualifying service, for each complete year, or its equivalent, of teaching.
(b)
(i) Is in a school district that qualifies for funds in that year under title I of the Elementary and Secondary Education Act of 1965, as amended; and
(ii) Has been selected by the Secretary based on a determination that a high concentration of students enrolled at the school are from low-income families.
(2)(i) The Secretary selects schools under paragraph (b)(1) of this section based on a ranking by the State education agency.
(ii) The State education agency shall base its ranking of the schools on objective standards and methods. These standards must take into account the numbers and percentages of title I children attending those schools.
(3) The Secretary considers all elementary and secondary schools operated by the Bureau of Indian Affairs (BIA) or operated on Indian reservations by Indian tribal groups under contract with BIA to qualify as schools serving low-income students.
(4) For each academic year, the Secretary notifies participating institutions of the schools selected under paragraph (b) of this section.
(5) The cancellation rate is 15 percent of the original principal loan amount, plus the interest on the unpaid balance accruing during the year of qualifying service, for each complete academic year, or its equivalent, of full-time teaching.
(6) [Reserved]
(7) Cancellation for full-time teaching under paragraph (b) of this section is available only for teaching beginning with academic year 1966-67.
(c)
(2) The cancellation rate is 15 percent of the original principal loan amount, plus the interest on the unpaid balance accruing during the year of qualifying service, for each complete academic year, or its equivalent, of full-time teaching.
(3) A borrower qualifies for cancellation under this paragraph only if a majority of the students whom the borrower teaches are handicapped children.
(4) Cancellation for full-time teaching under paragraph (c) of this section is available only for teaching beginning with the academic year 1967-68.
(d)
(e)
(a)
(2) An institution must cancel up to 100 percent of the outstanding balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992, for full-time service as a nurse or medical technician performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the borrower's promissory note.
(b)
(2) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992, for employment in a child or family service agency on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(c)
(2) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992 for early intervention service performed on or after October 7, 1998, if
(d)
(2) Cancellation rates are—
(i) 15 percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the first and second years of full-time employment;
(ii) 20 percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the third and fourth years of full-time employment; and
(iii) 30 percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for the fifth year of full-time employment.
(a)(1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins or NDSL made on or after November 29, 1990, for full-time service as a law enforcement or corrections officer for an eligible employing agency.
(2) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL or Defense loan made prior to November 29, 1990, for law enforcement or correction officer service performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(3) An eligible employing agency is an agency—
(i) That is a local, State, or Federal law enforcement or corrections agency;
(ii) That is public-funded; and
(iii) The principal activities of which pertain to crime prevention, control, or reduction or the enforcement of the criminal law.
(4) Agencies that are primarily responsible for enforcement of civil, regulatory, or administrative laws are ineligible employing agencies.
(5) A borrower qualifies for cancellation under this section only if the borrower is—
(i) A sworn law enforcement or corrections officer; or
(ii) A person whose principal responsibilities are unique to the criminal justice system.
(6) To qualify for a cancellation under this section, the borrower's service must be essential in the performance of the eligible employing agency's primary mission.
(7) The agency must be able to document the employee's functions.
(8) A borrower whose principal official responsibilities are administrative or supportive does not qualify for cancellation under this section.
(b)(1) To qualify for cancellation under paragraph (a) of this section, a borrower shall work full-time for 12 consecutive months.
(2) Cancellation rates are—
(i) 15 percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the first and second years of full-time employment;
(ii) 20 percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the third and fourth years of full-time employment; and
(iii) 30 percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for the fifth year of full-time employment.
(a)(1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's NDSL or Federal Perkins loan, for service as a full-time staff member in a Head Start program.
(2) An institution must cancel up to 100 percent of the outstanding balance on a Defense loan for service as a full-time staff member in a Head Start program performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(3) The Head Start program in which the borrower serves must operate for a complete academic year, or its equivalent.
(4) In order to qualify for cancellation, the borrower's salary may not exceed the salary of a comparable employee working in the local educational agency of the area served by the local Head Start program.
(b) The cancellation rate is 15 percent of the original loan principal, plus the interest on the unpaid balance accruing during the year of qualifying service, for each complete academic year, or its equivalent, of full-time teaching service.
(c)(1) “Head Start” is a preschool program carried out under the Head Start Act (subchapter B, chapter 8 of title VI of Pub. L. 97-35, the Budget Reconciliation Act of 1981, as amended; formerly authorized under section 222(a)(1) of the Economic Opportunity Act of 1964). (42 U.S.C. 2809 (a) (1))
(2) “Full-time staff member” is a person regularly employed in a full-time professional capacity to carry out the educational part of a Head Start program.
(a)
(2) The cancellation rate is 12
(3) Service for less than a complete year, including any fraction of a year beyond a complete year of service, does not qualify for military cancellation.
(b)
(2) The cancellation rate is 12
(3) Service for less than a complete year, including any fraction of a year beyond a complete year of service, does not qualify for military cancellation.
(a)(1) An institution must cancel up to 70 percent of the outstanding balance on a Perkins loan, and 70 percent of the outstanding balance of an NDSL made on or after October 7, 1998, for service as a volunteer under The Peace Corps Act or The Domestic Volunteer Service Act of 1973 (ACTION programs).
(2) An institution must cancel up to 70 percent of the outstanding balance on an NDSL or Defense loan for service as a volunteer under The Peace Corps Act or The Domestic Volunteer Service Act of 1973 (ACTION programs) performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(b) Cancellation rates are—
(1) Fifteen percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the first and second twelve-month periods of service;
(2) Twenty percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the third and fourth twelve-month periods of service.
(a)
(b)
(2) A borrower satisfies the criteria for a discharge of a loan based on a total and permanent disability if, during and at the end of the three-year conditional discharge period described in paragraph (b)(1) of this section—
(i) The borrower's annual earnings from employment do not exceed 100 percent of the poverty line for a family of two, as determined in accordance with the Community Service Block Grant Act; and
(ii) The borrower does not receive a new loan under the Perkins, FFEL or Direct Loan programs, except for a FFEL or Direct Consolidation Loan that does not include any loans that are in a conditional discharge status.
(3) If a borrower becomes totally and permanently disabled after receiving a Defense, NDSL, or Perkins loan, the institution must assign the loan to the Secretary if the borrower submits a certification by a physician and the institution reviewed the application and determined that it is complete and that it supports the conclusion that the borrower has a total and permanent disability as defined in § 674.51(s).
(4) At the time the loan is assigned to the Secretary the institution must notify the borrower that the loan has been assigned to the Secretary for determination of eligibility for a total and permanent disability discharge.
(5) If the Secretary determines that the certification provided by the borrower does not support the conclusion that the borrower meets the criteria for a total and permanent disability discharge, the Secretary notifies the borrower that the application for a disability discharge has been denied, and that the loan is due and payable under the terms of the promissory note.
(6) If the Secretary makes an initial determination that the borrower is totally and permanently disabled, the Secretary notifies the borrower that the loan will be in a conditional discharge status for a period of up to three years after the date the borrower became totally and permanently disabled as certified under § 674.61(b)(3). This notification identifies the conditions of the conditional discharge period specified in paragraphs (b)(6) through (b)(9) of this section and specifies that all or part of the three-year period may predate the Secretary's initial determination.
(7) During the conditional discharge period, the borrower—
(i) Is not required to make any payments on the loan;
(ii) Is not considered past due or in default on the loan, unless the loan was
(iii) Must promptly notify the Secretary of any changes in address or phone number;
(iv) Must promptly notify the Secretary if the borrower's annual earnings from employment exceed the amount specified in paragraph (b)(2)(i) of this section; and
(v) Must provide the Secretary, upon request, with additional documentation or information related to the borrower's eligibility for discharge under this section.
(8) If, during and at the end of the conditional discharge period, the borrower continues to satisfy the eligibility criteria for a total and permanent disability discharge, as described in paragraph (b)(2) of this section, the balance of the loan is discharged.
(9) If, at any time during or at the end of the three-year conditional discharge period, the borrower does not continue to meet the eligibility requirements for total and permanent disability discharge, the Secretary resumes collection activity on the loan. The Secretary does not require the borrower to pay any interest that accrued on the loan from the date of the initial determination described in paragraph (b)(6) of this section through the end of the conditional discharge period.
(10) If the institution receives any payments from or on behalf of the borrower on or attributable to a loan that has been assigned to the Secretary for determination of eligibility for a total and permanent disability discharge, the institution must forward those payments to the Secretary for crediting to the borrower's account. At the same time that the institution forwards the payment, it must notify the borrower that there is no obligation to make payments on the loan while it is conditionally discharged prior to a final determination of eligibility for a total and permanent disability discharge, unless the Secretary directs the borrower otherwise.
(11) When the Secretary makes a final determination to discharge the loan, the Secretary returns to the sender any payments received on the loan after the date the borrower became totally and permanently disabled.
(c)
(d)
(a) No portion of a loan may be cancelled for teaching. Head Start, volunteer or military service if the borrower's service is performed—
(1) During the same period that he or she received the loan; or
(2) Before the date the loan was disbursed to the borrower.
(b) The institution shall not refund a repayment made during a period for which the borrower qualified for a cancellation unless the borrower made the payment due to an institutional error.
(a)
(2) The institution's share of cancelled principal and interest is computed by the following ratio:
(b)
An asterisk (*) indicates provisions that are common to parts 674, 675, and 676. The use of asterisks will assure participating institutions that a provision of one regulation is identical to the corresponding provisions in the other two.
42 U.S.C. 2751-2756b, unless otherwise noted.
(a) The Federal Work-Study (FWS) program provides part-time employment to students attending institutions of higher education who need the earnings to help meet their costs of postsecondary education and encourages students receiving FWS assistance to participate in community service activities.
*(b) Provisions in these regulations that are common to all campus-based programs are identified with an asterisk.
(a) The definitions of the following terms used in this part are set forth in subpart A of the Student Assistance General Provisions, 34 CFR 668:
(b) The Secretary defines other terms used in this part as follows:
(1) Such fields as health care, child care (including child care services provided on campus that are open and accessible to the community), literacy training, education (including tutorial services), welfare, social services, transportation, housing and neighborhood improvement, public safety, crime prevention and control, recreation, rural development, and community improvement;
(2) Work in service opportunities or youth corps as defined in section 101 of the National and Community Service Act of 1990, and service in the agencies, institutions and activities designated in section 124(a) of that Act;
(3) Support services to students with disabilities, including students with disabilities who are enrolled at the institution; and
(4) Activities in which a student serves as a mentor for such purposes as—
(i) Tutoring;
(ii) Supporting educational and recreational activities; and
(iii) Counseling, including career counseling.
(1) Is enrolled in a program or course above the baccalaureate level at an institution of higher education or is enrolled in a program leading to a first professional degree;
(2) Has completed the equivalent of at least three years of full-time study at an institution of higher education, either prior to entrance into the program or as part of the program itself; and
(3) Is not receiving title IV aid as an undergraduate student for the same period of enrollment.
*
*
To participate in the FWS program, an institution of higher education shall enter into a participation agreement with the Secretary. The agreement provides that, among other things, the institution shall—
(a) Use the funds it receives solely for the purposes specified in this part;
(b) Administer the FWS program in accordance with the HEA, the provisions of this part, and the Student Assistance General Provisions regulations, 34 CFR part 668;
(c) Make employment under the FWS program reasonably available, to the extent of available funds, to all eligible students;
(d) Award FWS employment, to the maximum extent practicable, that will complement and reinforce each recipient's educational program or career goals;
(e) Assure that employment under this part may be used to support programs for supportive services to students with disabilities; and
(f) Inform all eligible students of the opportunity to perform community services and consult with local nonprofit, governmental, and community-based organizations to identify those opportunities.
A student at an institution of higher education is eligible to receive part-time employment under the FWS program for an award year if the student—
(a) Meets the relevant eligibility requirements contained in 34 CFR 668.32;
(b) Is enrolled or accepted for enrollment as an undergraduate, graduate or professional student at the institution; and
(c) Has financial need as determined in accordance with part F of title IV of the HEA. A member of a religious order (an order, community, society, agency, or organization) who is pursuing a course of study at an institution of higher education is considered to have no financial need if that religious order—
(1) Has as its primary objective the promotion of ideals and beliefs regarding a Supreme Being;
(2) Requires its members to forego monetary or other support substantially beyond the support it provides; and
(3) Directs the member to pursue the course of study or provides subsistence support to its members.
(a) An institution shall make employment under FWS reasonably available, to the extent of available funds, to all eligible students.
(b) An institution shall establish selection procedures and those procedures must be—
(1) Uniformly applied;
(2) In writing; and
(3) Maintained in the institution's files.
(c)
(a)(1) An institution must pay a student FWS compensation at least once a month.
(2) Before an institution makes an initial disbursement of FWS compensation to a student for an award period, the institution must notify the student of the amount of funds the student is authorized to earn, and how and when the FWS compensation will be paid.
(3) An institution must pay FWS compensation to a student by—
(i) Check or similar instrument that the student can cash on his or her own endorsement;
(ii) Initiating an electronic funds transfer (EFT) to a bank account designated by the student after obtaining
(iii) Crediting the student's account at the institution after obtaining the authorization described in paragraph (a)(4)(i) of this section. The institution may only credit the student's account at the institution to satisfy current award year charges for—
(A) Tuition and fees;
(B) Board, if the student contracts with the institution for board;
(C) Room, if the student contracts with the institution for room; and
(D) Other institutionally provided educationally related goods and services; or
(iv) Crediting the student's account at the institution to satisfy minor prior award year authorized charges if these charges are less than $100 or if the payment of these charges does not, and will not, prevent the student from paying his or her current educational costs after obtaining the authorization described in paragraph (a)(4)(i) of this section.
(4)(i) Except for the noncash contributions allowed under paragraphs (b)(2) and (b)(3) of this section, an institution must obtain a separate written authorization from the student if the student is paid FWS compensation by—
(A) Crediting the student's account at the institution; or (B) Initiating an EFT to a bank account designated by the student.
(ii) If an institution obtains a written authorization from the student, the institution may hold excess FWS funds under paragraph (a)(8) of this section.
(iii) The institution must obtain and use the written authorization in accordance with the requirements of paragraphs (a)(5) and (a)(6) of this section.
(5) In obtaining the student's written authorization described in paragraph (a)(4) of this section, an institution—
(i) May not require or coerce the student to provide that authorization;
(ii) Must allow the student to cancel or modify that authorization at any time; and
(iii) Must clearly explain to the student how it will carry out that activity.
(6)(i) If a student modifies the written authorization described in paragraph (a)(4) of this section, the modification takes effect on the date the institution receives the modification notice.
(ii) If a student cancels the written authorization described in paragraph (a)(4)(i)(A) of this section, the institution may use the FWS compensation to pay only those authorized charges incurred by the student before the institution received the notice.
(7) If an institution pays a student FWS compensation by crediting the student's account, and the result is a credit balance, the institution must pay the credit balance directly to the student as soon as possible but no later than 14 days after the balance occurred on the account.
(8) Except if prohibited by the Secretary under the reimbursement payment method, an institution may hold, on behalf of the student, FWS funds that would otherwise be paid directly to the student under paragraph (a)(7) of this section, if the institution obtains the authorization described in paragraph (a)(4)(ii) of this section. If an institution holds excess FWS funds, the institution must—
(i) Identify the amount of FWS funds the institution holds for each student in a subsidiary ledger account designated for that purpose;
(ii) Maintain, at all times, cash in its bank account in an amount at least equal to the amount of FWS funds the institution holds for the student; and
(iii) Pay any remaining balance by the end of the institution's final FWS payroll period for an award period.
(9) If a student cancels the written authorization as described in paragraph (a)(4)(ii) of this section to hold excess FWS funds, the institution must pay those funds directly to the student as soon as possible but no later than 14 days after the institution receives that cancellation notice.
(10) Regardless of who employs the student, the institution is responsible for ensuring that the student is paid for work performed.
(11) A student's FWS compensation is earned when the student performs the work.
(12) An institution may pay a student after the student's last day of attendance for FWS compensation earned
(b)(1) Except for the noncash contributions allowed under paragraph (b)(2) or (b)(3) of this section, an institution must pay the student its share of his or her FWS compensation at the same time it pays the Federal share.
(2) If an institution pays a student its FWS share for an award period in the form of tuition, fees, services, or equipment, it must pay that share before the student's final payroll period.
(3) If an institution pays its FWS share in the form of prepaid tuition, fees, services, or equipment for a forthcoming academic period, it must give the student a statement before the close of his or her final payroll period listing the amount of tuition, fees, services, or equipment earned.
(c) A correspondence student must submit his or her first completed lesson before receiving a payment.
(d) The institution may not obtain a student's power of attorney to authorize any disbursement of funds without prior approval from the Secretary.
(a)
(1) Paying the Federal share of FWS wages;
(2) Paying administrative expenses as provided for in 34 CFR 673.7;
(3) Meeting the cost of a Work-Colleges program under subpart C;
(4) Meeting the cost of a Job Location and Development program under subpart B; and
(5) Transferring a portion of its FWS allocation to its FSEOG program as described in paragraph (f) of this section.
(b)
(2) Before an institution may spend its current year FWS allocation, it shall spend any funds carried forward from the previous year.
(c)
(d) The institution may use the funds carried forward or carried back under paragraphs (c) and (d) of this section, respectively, for activities described in paragraph (a) of this section.
(e)
(2) An institution shall use transferred funds according to the requirements of the program to which they are transferred.
(3) An institution shall report any transferred funds on the Fiscal Operations Report required under § 675.19(b).
(f)
(g)
(i) Reading tutoring project that employs one or more FWS students as reading tutors for children who are preschool age or are in elementary school; or
(ii) Family literacy project that employs one or more FWS students in family literacy activities.
(2) The Secretary may waive the requirements in paragraph (g)(1) of this
(3) To the extent practicable, in providing reading tutors for children under paragraph (g)(1)(i), an institution must—
(i) Give priority to the employment of students to tutor in reading in schools that are participating in a reading reform project that—
(A) Is designed to train teachers how to teach reading on the basis of scientifically-based research on reading; and
(B) Is funded under the Elementary and Secondary Education Act of 1965; and
(ii) Ensure that any student who is employed in a school participating in a reading reform project described in paragraph (g)(3)(i) of this section receives training from the employing school in the instructional practices used by the school.
(h)
(2) Beginning with the 1999-2000 award year, an institution may pay students for a reasonable amount of time spent for travel that is directly related to employment in community service activities (including tutoring in reading and family literacy activities).
(a)
(2) If an institution uses a fiscal agent, that agent may perform only ministerial acts.
(3) An institution shall maintain funds received under this part in accordance with the requirements in § 668.163.
(b)
(2) The institution must also establish and maintain program and fiscal records that—
(i) Include a certification by the student's supervisor, an official of the institution or off-campus agency, that each student has worked and earned the amount being paid. The certification must include or be supported by, for students paid on an hourly basis, a time record showing the hours each student worked in clock time sequence, or the total hours worked per day;
(ii) Include a payroll voucher containing sufficient information to support all payroll disbursements;
(iii) Include a noncash contribution record to document any payment of the institution's share of the student's earnings in the form of services and equipment (see § 675.27(a)); and
(iv) Are reconciled at least monthly.
(3) Each year an institution shall submit a Fiscal Operations Report plus other information the Secretary requires. The institution shall insure that the information reported is accurate and shall submit it on the form and at the time specified by the Secretary.
(a)
(1) The institution in which the student is enrolled;
(2) A Federal, State, or local public agency;
(3) A private nonprofit organization; or
(4) A private for-profit organization.
(b)
(2) The institution may enter into an agreement with an agency or organization that has professional direction and staff.
(3) The institution is responsible for ensuring that—
(i) Payment for work performed under each agreement is properly documented; and
(ii) Each student's work is properly supervised.
(4) The agreement between the institution and the employing agency or nonprofit organization may require the employer to pay—
(i) The non-Federal share of the student earnings; and
(ii) Required employer costs such as the employer's share of social security or workers’ compensation.
(c)
(i) Type of work;
(ii) Geographical region;
(iii) Employee proficiency; and
(iv) Any applicable Federal, State, or local law.
(2) FWS employment may not—
(i) Impair existing service contracts;
(ii) Displace employees;
(iii) Fill jobs that are vacant because the employer's regular employees are on strike;
(iv) Involve the construction, operation, or maintenance of any part of a facility used or to be used for religious worship or sectarian instruction; or
(v) Include employment for the U.S. Department of Education.
(d)
(i) Enrolled in an internship;
(ii) Enrolled in a practicum; or
(iii) Employed in a research, teaching, or other assistantship.
(2) A student employed in an FWS job and receiving academic credit for that job may not be—
(i) Paid less than he or she would be if no academic credit were received;
(ii) Paid for receiving instruction in a classroom, laboratory, or other academic setting; and
(iii) Paid unless the employer would normally pay the person for the same position.
(a) An institution, other than a proprietary institution, may employ a student to work for the institution itself, including those operations, such as food service, cleaning, maintenance, or security, for which the institution contracts, if the contract specifies—
(1) The number of students to be employed; and
(2) That the institution selects the students to be employed and determines each student's pay rate.
(b) A proprietary institution may employ a student to work for the institution, but only in jobs that—
(1) Are in community services as defined in § 675.2; or
(2) Are on campus and that—
(i) Involve the provision of student services as defined in § 675.2(b) that are directly related to the work-study student's training or education;
(ii) To the maximum extent possible, complement and reinforce the educational program or vocational goals of the student; and
(iii) Do not involve the solicitation of potential students to enroll at the proprietary institution.
(a) If a student is employed by a Federal, State, or local public agency, or a private nonprofit organization, the work that the student performs must be in the public interest.
(b)
(1) It primarily benefits the members of a limited membership organization such as a credit union, a fraternal or religious order, or a cooperative;
(2) It is for an elected official who is not responsible for the regular administration of Federal, State, or local government;
(3) It is work as a political aide for any elected official;
(4) A student's political support or party affiliation is taken into account in hiring him or her;
(5) It involves any partisan or nonpartisan political activity or is associated with a faction in an election for public or party office; or
(6) It involves lobbying on the Federal, State, or local level.
(a) An institution may use up to 25 percent of its FWS allocation and reallocation for an award year to pay the compensation of FWS students employed by a private for-profit organization.
(b) If a student is employed by a private, for-profit organization—
(1) The work that the student performs must be academically relevant to the student's educational program, to the maximum extent practicable; and
(2) The private for-profit organization—
(i) Must provide the non-Federal share of the student's compensation; and
(ii) May not use any FWS funds to pay an employee who would otherwise be employed by that organization.
(a)
(2) An institution may not count fringe benefits as part of the wage rate.
(3) An institution may pay a graduate student it employs a salary or an hourly wage, in accordance with its usual practices.
(b)
(a)(1) The institution shall determine the amount of earnings from a FWS job to be applied to a student's cost of attendance (attributed earnings) by subtracting taxes and job related costs from the student's gross earnings.
(2) Job related costs are costs the student incurs because of his or her job. Examples are uniforms and transportation to and from work. Room and
(b) If a student is employed under FWS during a vacation or other period when he or she is not attending classes, the institution shall apply the attributed earnings (earnings minus taxes and job related costs) to the cost of attendance for the next period of enrollment.
(a)(1) The Federal share of FWS compensation paid to a student employed other than by a private for-profit organization, as described in § 675.23, may not exceed 75 percent unless the Secretary approves a higher share under paragraph (a)(2) or (d) of this section.
(2) The Federal share of the compensation paid to a student may exceed 75 percent, but may not exceed 90 percent, if—
(i) The student is employed at a private nonprofit organization or a Federal, State, or local public agency that—
(A) Is not a part of, and is not owned, operated, or controlled by, or under common ownership, operation, or control with, the institution;
(B) Is selected by the institution on an individual case-by-case basis;
(C) Would otherwise be unable to afford the costs of this employment; and
(ii) The number of students compensated under paragraph (a)(2)(i) of this section is not more than 10 percent of the total number of students paid under the FWS Program at the institution.
(3) The Federal share of the compensation paid to a student employed by a private for-profit organization may not exceed 50 percent.
(4) An institution may not use FWS funds to pay a student after he or she has, in addition to other resources, earned $300 or more over his or her financial need.
(b) The institution may not include the following when determining the Federal share:
(1) Fringe benefits such as paid sick days, paid vacations, or paid holidays.
(2) The employer's share of social security, workers’ compensation, retirement, or any other welfare or insurance program that the employer must pay on account of the student employee.
(c) If an institution receives more money under an employment agreement from an off-campus employer than required employer costs, its not-Federal share, and any share of administrative costs that the employer agreed to pay, the excess funds must be—
(1) Used to reduce the Federal share on a dollar-for-dollar basis;
(2) Held in trust for off-campus student employment next year; or
(3) Refunded to the off-campus employer.
(d) For each award year, the Secretary authorizes a Federal share of 100 percent of the compensation earned by a student under this part if—
(1) The work performed by the student is for the institution itself, for a Federal, State, or local public agency, or for a private nonprofit organization; and
(2)(i) The institution in which the student is enrolled—
(A) Is designated as an eligible institution under—
(
(
(
(
(B) Requests that increased Federal share as part of its regular FWS funding application for that year;
(ii) The student is employed as a reading tutor for preschool age children or children who are in elementary school;
(iii) The student is performing family literacy activities in a family literacy
(iv) The student is employed as a mathematics tutor for children who are in elementary school through the ninth grade.
(a)(1) An institution may use any resource available to it, except funds allocated under the FWS program, to pay the institutional share of FWS compensation to its students. The institutional share may be paid in the form of services and equipment, e.g., tuition, room, board, and books.
(2) The institution shall document all amounts claimed as non-cash contributions.
(3) Non-cash compensation may not include forgiveness of a charge assessed solely because of a student's employment under the FWS program.
(b) An institution may not solicit or accept fees, commission, contributions, or gifts as a condition for FWS employment, nor permit any organization with which it has an employment agreement to do so.
The purpose of the Job Location and Development program is to expand off-campus job opportunities for students who are enrolled in eligible institutions of higher education and want jobs, regardless of their financial need, and to encourage students to participate in community service activities.
An institution may expend up to the lesser of $50,000 or 10 percent of its FWS allocation and reallocation for an award year to establish or expand a program under which the institution, separately or in combination with other eligible institutions, locates and develops jobs, including community service jobs, for currently enrolled students.
(a)(1)
(2) Costs related to the purchase, construction, or alteration of physical facilities or indirect administrative costs are not allowable.
(b)
(c)
(a) An institution participating in the FWS program may enter into a written agreement to establish and operate job location programs for its students with other participating institutions.
(b) The agreement described in paragraph (a) of this section must—
(1) Designate the administrator of the program; and
(2) Specify the terms, conditions, and performance standards of the program.
(c) Each institution shall retain responsibility for the proper disbursement of the Federal funds it contributes under an agreement with other eligible institutions.
(a) A FWS participating institution, to establish or expand these programs, shall enter into an agreement with the Secretary.
(b) The agreement must provide—
(1) That the institution will administer the programs in accordance with the HEA and the provisions of this part;
(2) That the institution will submit to the Secretary an annual report on the use of the funds and an evaluation of the effectiveness of the programs in benefiting the institution's students; and
(3) Satisfactory assurances that—
(i) The institution will not use program funds to locate and develop jobs at an eligible institution;
(ii) The institution will use program funds to locate and develop jobs for students during and between periods of attendance at the institution, not upon graduation;
(iii) The program will not displace employees or impair existing service contracts;
(iv) Program funds can realistically be expected to generate total student wages exceeding the total amount of the Federal funds spent under this subpart; and
(v) If the institution uses Federal funds to contract with another institution, suitable performance standards will be part of that contract.
Procedures and records concerning the administration of a JLD project established and operated under this subpart are governed by applicable provisions of § 675.19.
(a) If the Secretary terminates or suspends an institution's eligibility to participate in the FWS program, the action also applies to the institution's job location and development programs.
(b) The Secretary pays an institution's financial obligations incurred and allowable before the termination but not incurred—
(1) During a suspension; or
(2) In anticipation of a suspension.
(c) However, the institution must cancel as many outstanding obligations as possible.
The following definitions apply to this subpart:
(a)
(1) Is a public or private nonprofit institution with a commitment to community service;
(2) Has operated a comprehensive work-learning program for at least two years;
(3) Requires—
(i) All resident students who reside on campus to participate in a comprehensive work-learning program; and
(ii) The provision of services as an integral part of the institution's educational program and as part of the institution's educational philosophy; and
(4) Provides students participating in the comprehensive work-learning program with the opportunity to contribute to their education and to the welfare of the community as a whole.
(b)
(1) Is an integral and stated part of the institution's educational philosophy and program;
(2) Requires participation of all resident students for enrollment, participation, and graduation;
(3) Includes learning objectives, evaluation, and a record of work performance as part of the student's college record;
(4) Provides programmatic leadership by college personnel at levels comparable to traditional academic programs;
(5) Recognizes the educational role of work-learning supervisors; and
(6) Includes consequences for nonperformance or failure in the work-learning program similar to the consequences for failure in the regular academic program.
The Secretary allocates and reallocates funds based on each institution's approved request for Federal funds for the Work-Colleges program as a percent of the total of such approved requests for all applicant institutions.
The purpose of the Work-Colleges program is to recognize, encourage, and promote the use of comprehensive work-learning programs as a valuable educational approach when it is an integral part of the institution's educational program and a part of a financial plan that decreases reliance on grants and loans and to encourage students to participate in community service activities.
(a) An institution that satisfies the definition of “work-college” in § 675.41(a) and wishes to participate in the Work-Colleges program must apply to the Secretary at the time and in the manner prescribed by the Secretary.
(b) An institution may expend funds separately, or in combination with other eligible institutions, to provide work-learning opportunities for currently enrolled students.
(c) For any given award year, Federal funds allocated and reallocated for that award year under sections 442 and 462 of the HEA may be transferred for the purpose of carrying out the Work-Colleges program to provide flexibility in strengthening the self-help-through-work element in financial aid packaging.
(a)
(1) Support the educational costs of qualified students through self-help payments or credits provided under the work-learning program within the limits of part F of title IV of the HEA.
(2) Promote the work-learning-service experience as a tool of postsecondary education, financial self-help, and community service-learning opportunities.
(3) Carry out activities in sections 443 or 446 of the HEA.
(4) Administer, develop, and assess comprehensive work-learning programs including—
(i) Community-based work-learning alternatives that expand opportunities for community service and career-related work; and
(ii) Alternatives that develop sound citizenship, encourage student persistence, and make optimum use of assistance under the Work-Colleges program in education and student development.
(5) Coordinate and carry out joint projects and activities to promote work service learning.
(6) Carry out a comprehensive, longitudinal study of student academic progress and academic and career outcomes, relative to student self-sufficiency in financing their higher education, repayment of student loans,
(b)
(c)
An institution participating in the Work-Colleges program may not use its allocated and reallocated program funds and transferred funds provided under its Federal Perkins Loan or its FWS program to pay costs related to the purchase, construction, or alteration of physical facilities or indirect administrative costs.
(a) An institution participating in the Work-Colleges program may enter into a written agreement with another participating institution to promote the work-learning-service experience.
(b) The agreement described in paragraph (a) of this section must—
(1) Designate the administrator of the program; and
(2) Specify the terms, conditions, and performance standards of the program.
(c) Each institution shall retain responsibility for the proper disbursement of the Federal funds it contributes under an agreement with other eligible institutions.
To participate in the Work-Colleges program, an institution shall enter into an agreement with the Secretary. The agreement provides that, among other things, the institution shall—
(a) Assure that it will comply with all the appropriate provisions of the HEA and the appropriate provisions of the regulations;
(b) Assure that it satisfies the definition of “work-college” in § 675.41(a);
(c) Assure that it will match the Federal funds according to the requirements in § 675.45(c); and
(d) Assure that it will use funds only to carry out the activities in § 675.45(a).
In administering a Work-Colleges program under this subpart, an institution shall comply with the applicable provisions of 34 CFR part 673 and this part 675.
Procedures for termination and suspension under this subpart are governed by applicable provisions found in 34 CFR part 668, subpart G of the Student Assistance General Provisions regulations.
An asterisk (*) indicates provisions that are common to parts 674, 675, and 676. The use of asterisks will assure participating institutions that a provision of one regulation is identical to the corresponding provisions in the other two.
20 U.S.C. 1070b—1070b-3, unless otherwise noted.
(a) The Federal Supplemental Educational Opportunity Grant (FSEOG) Program awards grants to financially needy students attending institutions of higher education to help them pay their educational costs.
*(b) Provisions in these regulations that are common to all campus-based programs are identified with an asterisk.
(a) The definitions of the following terms used in this part are set forth in subpart A of the Student Assistance General Provisions, 34 CFR part 668:
(b) The Secretary defines other terms used in this part as follows:
*
*
(1) Has not earned a baccalaureate or first professional degree; and
(2) Is in an undergraduate course of study which usually does not exceed 4 academic years, or is enrolled in a 4 to 5 academic year program designed to lead to a first degree. A student enrolled in a program of any other length is considered an undergraduate student for only the first 4 academic years of that program.
To participate in the FSEOG program, an institution shall enter into a participation agreement with the Secretary. The participation agreement provides, among other things, that the institution shall—
(a) Use the funds it receives solely for the purposes specified in this part; and
(b) Administer the FSEOG program in accordance with the HEA, the provisions of this part, and the Student Assistance General Provisions regulations, 34 CFR part 668.
A student at an institution of higher education is eligible to receive an FSEOG for an award year if the student—
(a) Meets the relevant eligibility requirements contained in 34 CFR 668.32;
(b) Is enrolled or accepted for enrollment as an undergraduate student at the institution; and
(c) Has financial need as determined in accordance with part F of title IV of the HEA. A member of a religious order (an order, community, society, agency, or organization) who is pursuing a course of study at an institution of higher education is considered to have no financial need if that religious order—
(1) Has as its primary objective the promotion of ideals and beliefs regarding a Supreme Being;
(2) Requires its members to forego monetary or other support substantially beyond the support it provides; and
(3) Directs the member to pursue the course of study or provides subsistence support to its members.
(a)(1) In selecting among eligible students for FSEOG awards in each award year, an institution shall select those students with the lowest expected family contributions who will also receive Federal Pell Grants in that year.
(2) If the institution has FSEOG funds remaining after giving FSEOG awards to all the Federal Pell Grant recipients at the institution, the institution shall award the remaining FSEOG funds to those eligible students with the lowest expected family contributions who will not receive Federal Pell Grants.
(b)
(a)(1) Except as provided in paragraphs (b) and (e) of this section, an institution shall pay in each payment period a portion of an FSEOG awarded for a full academic year.
(2) The institution shall determine the amount paid each payment period by the following fraction:
(3) An institution may pay the student, within each payment period, at such times and in such amounts as it determines best meets the student's needs.
(b) If a student incurs uneven cost or resources during an academic year and needs additional funds in a particular payment period, the institution may pay FSEOG funds to the student for those uneven costs.
(c) An institution shall disburse funds to a student or the student's account in accordance with the provisions in § 668.164.
(d)(1) The institution shall return to the FSEOG account any funds paid to a student who, before the first day of classes—
(i) Officially or unofficially withdraws; or
(ii) Is expelled.
(2) A student who does not begin class attendance is deemed to have withdrawn.
(e) Only one payment is necessary if the total amount the institution awards a student for an academic year under the FSEOG program is less than $501.
(f) A correspondence student shall submit his or her first completed lesson before receiving an FSEOG payment.
(a)
(1) Making grants to eligible students; and
(2) Paying administrative expenses as provided for in 34 CFR 673.7.
(b)
(c)
(2) Before an institution may spend its current year FSEOG allocation, it must spend any funds carried forward from the previous year.
(d)
(e)
(f)
(a)
(2) An institution shall maintain funds received under this part in accordance with the requirements in § 668.163.
(b)
(2) An institution shall establish and maintain program and fiscal records that are reconciled at least monthly.
(3) Each year an institution shall submit a Fiscal Operations Report plus other information the Secretary requires. The institution shall insure that the information reported is accurate and shall submit it on the form and at the time specified by the Secretary.
(a) An institution may award an FSEOG for an academic year in an amount it determines a student needs to continue his or her studies. However, except as provided in paragraph (c) of this section, an FSEOG may not be awarded for a full academic year that is—
(1) Less than $100; or
(2) More than $4,000.
(b) For a student enrolled for less than a full academic year, the minimum allowable FSEOG may be proportionately reduced.
(c) The maximum amount of the FSEOG may be increased from $4,000 to as much as $4,400 for a student participating in a program of study abroad that is approved for credit by the home institution, if reasonable costs for the study abroad program exceed the cost of attendance at the home institution.
(a) Except as provided in paragraph (b) of this section, for the 1993-94 award year and subsequent award years, the Federal share of the FSEOG awards made by an institution may not exceed 75 percent of the amount of FSEOG awards made by that institution.
(b) The Secretary authorizes, for each award year, a Federal share of 100 percent of the FSEOGs awarded to students by an institution that—
(1) Is designated as an eligible institution under—
(i) The Developing Hispanic-Serving Institutions Program (34 CFR part 606);
(ii) The Strengthening Institutions Program, American Indian Tribally Controlled Colleges and Universities Program, or Alaska Native and Native Hawaiian-Serving Institutions Program (34 CFR part 607); or
(iii) The Strengthening Historically Black Colleges and Universities Program (34 CFR part 608); and
(2) Requests that increased Federal share as part of its regular SEOG funding application for that year.
(c) The non-Federal share of SEOG awards must be made from the institution's own resources, which include for this purpose—
(1) Institutional grants and scholarships;
(2) Tuition or fee waivers;
(3) State scholarships; and
(4) Foundation or other charitable organization funds.
20 U.S.C. 1071 to 1087-2, unless otherwise noted.
(a) This part governs the following four programs collectively referred to in these regulations as “the Federal Family Education Loan (FFEL) programs,” in which lenders use their own funds to make loans to enable a student or his or her parents to pay the costs of the student's attendance at postsecondary schools:
(1) The Federal Stafford Loan (Stafford) Program, which encourages making loans to undergraduate, graduate, and professional students.
(2) The Federal Supplemental Loans for Students (SLS) Program, as in effect for periods of enrollment that began prior to July 1, 1994, which encouraged making loans to graduate, professional, independent undergraduate, and certain dependent undergraduate students.
(3) The Federal PLUS (PLUS) Program, which encourages making loans to parents of dependent undergraduate students. Before October 17, 1986, the PLUS Program also provided for making loans to graduate, professional, and independent undergraduate students. Before July 1, 1993, the PLUS Program also provided for making loans to parents of dependent graduate students.
(4) The Federal Consolidation Loan Program (Consolidation Loan Program), which encourages making loans to borrowers for the purpose of consolidating loans: under the Federal Insured Student Loan (FISL), Stafford loan, SLS, ALAS (as in effect before October 17, 1986), PLUS, Perkins Loan programs, the Health Professions Student Loan (HPSL) including Loans for Disadvantaged Students (LDS) Program authorized by subpart II of part A of Title VII of the Public Health Services Act, Health Education Assistance Loans (HEAL) authorized by subpart I of Part A of Title VII of the Health Services Act, Nursing Student Loan Program loans authorized by subpart II of part B of title VIII of the Public Health Service Act, and existing loans obtained under the Consolidation Loan Program, and William D. Ford Direct Loan (Direct Loan) program loans, if the application for the Consolidation loan was received on or after November 13, 1997.
(b)(1) Except for the loans guaranteed directly by the Secretary described in paragraph (b)(2) of this section, a guaranty agency guarantees a lender against losses due to default by the borrower on a FFEL loan. If the guaranty agency meets certain Federal requirements, the guaranty agency is reimbursed by the Secretary for all or part of the amount of default claims it pays to lenders.
(2)(i) The Secretary guarantees lenders against losses—
(A) Within the Stafford Loan Program, on loans made under Federal Insured Student Loan (FISL) Program;
(B) Within the PLUS Program, on loans made under the Federal PLUS Program;
(C) Within the SLS Program, on loans made under the Federal SLS Program as in effect for periods of enrollment that began prior to July 1, 1994; and
(D) Within the Consolidation Loan Program, on loans made under the Federal Consolidation Loan Program.
(ii) The loan programs listed in paragraph (b)(2)(i) of this section collectively are referred to in these regulations as the “Federal Guaranteed Student Loan (GSL) programs.”
(iii) The Federal GSL programs are authorized to operate in States not served by a guaranty agency program. In addition, the FISL and Federal SLS (as in effect for periods of enrollment that began prior to July 1, 1994) programs are authorized, under limited circumstances, to operate in States in which a guaranty agency program does not serve all eligible students.
(a) Eligible banks, savings and loan associations, credit unions, pension funds, insurance companies, schools, and State and private nonprofit agencies may make loans.
(b) Institutions of higher education, including most colleges, universities, graduate and professional schools, and many vocational, technical schools may participate as schools, enabling an eligible student or his or her parents to obtain a loan to pay for the student's cost of education.
(c) Students who meet certain requirements, including enrollment at a participating school, may borrow under the Stafford Loan and, for periods of enrollment that began prior to July 1, 1994, the SLS program. Parents of eligible dependent undergraduate students may borrow under the PLUS Program. Borrowers with outstanding Stafford, SLS, FISL, Perkins, HPSL, HEAL, ALAS, PLUS, or Nursing Student Loan Program loans, or married couples each of whom have eligible loans under these programs may borrow under the Consolidation Loan Program.
(a)
(b) [Reserved]
(c)
(d)
(e)
(2)
(3)
(4)
(5)
(6)
(7)
(a) Subpart B of this part contains general provisions that are applicable to all participants in the FFEL and Federal GSL programs.
(b) The administration of the FFEL programs by a guaranty agency is subject to subparts C, D, F, and G of this part.
(c) The Federal FFEL and Federal GSL programs are subject to subparts C, E, F, and G of this part.
(d) Certain requirements applicable to schools under all the FFEL and Federal GSL programs are set forth in subpart F of this part.
(a)(1) The definitions of the following terms used in this part are set forth in subpart A of the Student Assistance General Provisions, 34 CFR part 668:
(2) The following definitions are set forth in the regulations for Institutional Eligibility under the Higher Education Act of 1965, as amended, 34 CFR part 600:
(3) The definition for cost of attendance is set forth in section 472 of the Act, as amended.
(b) The following definitions also apply to this part:
(1) 270 days for a loan repayable in monthly installments; or
(2) 330 days for a loan repayable in less frequent installments.
(i) Except as provided in paragraph (2)(iii) of this definition, national service education awards or post-service benefits under title I of the National and Community Service Act of 1990 and veterans’ educational benefits paid under chapters 30, 31, 32, and 35 of title 38 of the United States Code;
(ii) Educational benefits paid under Chapters 106 and 107 of Title 10 of the United States Code (Selected Reserve Educational Assistance Program);
(iii) Reserve Officer Training Corps (ROTC) scholarships and subsistence allowances awarded under Chapter 2 of Title 10 and Chapter 2 of Title 37 of the United States Code;
(iv) Benefits paid under Pub. L. 97-376, section 156: Restored Entitlement Program for Survivors (or Quayle benefits);
(v) Benefits paid under Pub. L. 96-342, section 903: Educational Assistance Pilot Program;
(vi) Any educational benefits paid because of enrollment in a postsecondary education institution;
(vii) The estimated amount of other Federal student financial aid, including but not limited to a Federal Pell Grant, campus-based aid, and the gross amount (including fees) of a Federal Stafford, Unsubsidized Stafford and Federal PLUS loan.
(2) The estimated amount of assistance does not include—(i) Those amounts used to replace the expected family contribution, including—
(A) Unsubsidized and nonsubsidized Stafford loan amounts for which interest benefits are not payable.
(B) PLUS loan amounts; and
(C) Private and state-sponsored loan programs;
(ii) Federal Perkins loan and Federal Work-Study funds that the school determines the student has declined; and
(iii) For the purpose of determining eligibility for a subsidized Stafford loan, veterans’ educational benefits paid under chapter 30 of title 38 of the United States Code (Montgomery GI Bill—Active Duty) and national service education awards or post-service benefits under title I of the National and Community Service Act of 1990.
(1) Is enrolled in a program above the baccalaureate level at an institution of higher education or is enrolled in a program leading to a first professional degree;
(2) Has completed the equivalent of at least three academic years of full-time study at an institution of higher education, either before entrance into the program or as part of the program itself; and
(3) Is not receiving aid under title IV of the Act as an undergraduate student for the same period of enrollment.
(2) With respect to a National or State chartered bank, a mutual savings bank, a savings and loan association, a stock savings bank, or a credit union—
(i) The phrase “subject to examination and supervision” in section 435(d) of the Act means “subject to examination and supervision in its capacity as a lender”;
(ii) The phrase “does not have as its primary consumer credit function the making or holding of loans made to students under this part” in section 435(d) of the Act means that the lender does not, or in the case of a bank holding company, the company's wholly-owned subsidiaries as a group do not at any time, hold FFEL Program loans that total more than one-half of the lender's or subsidiaries’ combined consumer credit loan portfolio, including home mortgages held by the lender or its subsidiaries. For purposes of this paragraph, loans held in trust by a trustee lender are not considered part of the trustee lender's consumer credit function.
(3) A bank that is subject to examination and supervision by an agency of the United States, making student loans as a trustee, may be an eligible lender if it makes loans under an express trust, operated as a lender in the FFEL programs prior to January 1, 1975, and met the requirements of this paragraph prior to July 23, 1992.
(4) The corporate parent or other owner of a school that qualifies as an eligible lender under section 435(d) of the Act is not an eligible lender unless the corporate parent or owner itself qualifies as an eligible lender under section 435(d) of the Act.
(5) The term “eligible lender” does not include any lender that the Secretary determines, after notice and opportunity for a hearing before a designated Department official, has—
(i) Offered, directly or indirectly, points, premiums, payments, or other inducements, to any school or other party to secure applicants for FFEL loans, except that a lender is not prohibited from providing assistance to schools comparable to the kinds of assistance provided by the Secretary to schools under, or in furtherance of, the Federal Direct Loan Program.
(ii) Conducted unsolicited mailings to a student or a student's parents of FFEL loan application forms, except to a student who previously has received a FFEL loan from the lender or to a student's parent who previously has received a FFEL loan from the lender;
(iii) Offered, directly or indirectly, a FFEL loan to a prospective borrower to induce the purchase of a policy of insurance or other product or service by the borrower or other person; or
(iv) Engaged in fraudulent or misleading advertising with respect to its FFEL program loan activities.
(6) The term eligible lender does not include any lender that—
(i) Is debarred or suspended, or any of whose principals or affiliates (as those terms are defined in 34 CFR part 85) is debarred or suspended under Executive Order (E.O.) 12549 (3 CFR, 1986 Comp., p. 189) or the Federal Acquisition Regulation (FAR), 48 CFR part 9, subpart 9.4;
(ii) Is an affiliate, as defined in 34 CFR part 85, of any person who is debarred or suspended under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4; or
(iii) Employs a person who is debarred or suspended under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4, in a capacity that involves the administration or receipt of FFEL Program funds.
(2) For unsubsidized Stafford loans, the period that begins on the day after the expiration of the applicable grace period that follows after the student ceases to be enrolled on at least a half-time basis and ending no later than 10 years or 25 years under an extended repayment schedule, from that date, exclusive of any period of deferment or forbearance. However, payments of interest are the responsibility of the borrower during the in-school and grace period, but may be capitalized by the lender.
(3) For SLS loans, the period that begins on the date the loan is disbursed, or if the loan is disbursed in more than one installment, on the date the last disbursement is made and ending no later than 10 years from that date, exclusive of any period of deferment or
(4) For Federal PLUS loans, the period that begins on the date the loan is disbursed, or if the loan is disbursed in more than one installment, on the date the last disbursement is made and ending no later than 10 years, or 25 years under an extended repayment schedule, from that date, exclusive of any period of deferment or forbearance. Interest on the loan accrues and is due and payable from the date of the first disbursement of the loan.
(5) For Federal Consolidation loans, the period that begins on the date the loan is disbursed and ends no later than 10, 12, 15, 20, 25, or 30 years from that date depending upon the sum of the amount of the Consolidation loan, and the unpaid balance on other student loans, exclusive of any period of deferment or forbearance.
(2) For purposes of consolidating a defaulted loan under 34 CFR 682.201(c)(1)(iii)(C), the making of three (3) consecutive, on-time voluntary full monthly payments on a defaulted loan.
(3) The required full monthly payment amount may not be more than is reasonable and affordable based on the borrower's total financial circumstances. Voluntary payments are those payments made directly by the borrower, and do not include payments obtained by income tax off-set, garnishment, or income or asset execution. On-time means a payment received by the Secretary or a guaranty agency or its agent within 15 days of the scheduled due date.
(2) For purposes of an in-school deferment, the term includes an institution of higher education, whether or not it participates in any title IV program or has lost its eligibility to participate in the FFEL program because of a high default rate.
(a)
(1) In the case of an undergraduate student who seeks a Stafford loan or unsubsidized Stafford loan for the cost of attendance at a school that participates in the Pell Grant Program, has received a final determination, or, in the case of a student who has filed an application with the school for a Pell Grant, a preliminary determination, from the school of the student's eligibility or ineligibility for a Pell Grant and, if eligible, has applied for the period of enrollment for which the loan is sought;
(2) In the case of any student who seeks an unsubsidized Stafford loan for the cost of attendance at a school that participates in the Stafford Loan Program, the student must—
(i) Receive a determination of need for a subsidized Stafford loan; and
(ii) If the determination of need is in excess of $200, have made a request to a lender for a subsidized Stafford loan;
(3) For purposes of a dependent undergraduate student's eligibility for an additional unsubsidized Stafford loan amount, as described at § 682.204(d), is a dependent undergraduate student for whom the financial aid administrator determines and documents in the school's file, after review of the family financial information provided by the student and consideration of the student's debt burden, that the student's parents likely will be precluded by exceptional circumstances (e.g., denial of a PLUS loan to a parent based on adverse credit, the student's parent receives only public assistance or disability benefits, is incarcerated, or his or her whereabouts are unknown) from borrowing under the PLUS Program and the student's family is otherwise unable to provide the student's expected family contribution. A parent's refusal to borrow a PLUS loan does not
(4)(i) Reaffirms any FFEL loan amount on which there has been a total cessation of collection activity, including all principal, interest, collection costs, legal costs, and late charges that have accrued on that amount up to the date of reaffirmation.
(ii) For purposes of this section, reaffirmation means the acknowledgement of the loan by the borrower in a legally binding manner. The acknowledgement may include, but is not limited to, the borrower—
(A) Signing a new promissory note that includes the same terms and conditions as the original note signed by the borrower or repayment schedule; or
(B) Making a payment on the loan.
(5) The suspension of collection activity has been lifted from any loan on which collection activity had been suspended based on a conditional determination that the borrower was totally and permanently disabled under § 682.402(c).
(6) In the case of a borrower whose prior loan under title IV of the Act was discharged after a final determination of total and permanent disability, the student must—
(i) Obtain certification from a physician that the borrower is able to engage in substantial gainful activity;
(ii) Sign a statement acknowledging that the FFEL loan the borrower receives cannot be discharged in the future on the basis of any impairment present when the new loan is made, unless that impairment substantially deteriorates; and
(iii) In the case of a borrower whose previous loan under title IV of the Act was discharged due to a total and permanent disability on or after July 1, 2001 and before July 1, 2002, meets the requirements of paragraphs (a)(6)(i) and (a)(6)(ii) of this section. If the borrower applies for another loan within three years from the date that the borrower became totally and permanently disabled, as certified by the physician, the borrower must reaffirm the previously discharged loan before receiving the new loan.
(7) In the case of a borrower whose prior loan under title IV of the HEA was conditionally discharged based on an initial determination that the borrower was totally and permanently disabled, the borrower must—
(i) Comply with the requirements of paragraphs (a)(6)(i) and (a)(6)(ii) of this section; and
(ii) Sign a statement acknowledging that—
(A) The loan that has been conditionally discharged prior to a final determination of total and permanent disability cannot be discharged in the future on the basis of any impairment present when the borrower applied for a total and permanent disability discharge or when the new loan is made unless that impairment substantially deteriorates; and
(B) Collection activity will resume on any loans in a conditional discharge period, as described in paragraph 682.402(c)(16).
(8) In the case of any student who seeks a loan but does not have a certificate of graduation from a school providing secondary education or the recognized equivalent of such a certificate, the student meets the requirements under 34 CFR part 668.32(e).
(9) Is not serving in a medical internship or residency program, except for an internship in dentistry.
(b)
(i) Is borrowing to pay for the educational costs of a dependent undergraduate student who meets the requirements for an eligible student set forth in 34 CFR part 668;
(ii) Provides his or her and the student's social security number;
(iii) Meets the requirements pertaining to citizenship and residency that apply to the student in 34 CFR 668.33;
(iv) Meets the requirements concerning defaults and overpayments that apply to the student in 34 CFR 668.35 and meets the requirements of judgment liens that apply to the student under 34 CFR 668.32(g)(3);
(v) Except for the completion of a Statement of Selective Service Registration Status, complies with the requirements for submission of a Statement of Educational Purpose that apply to the student in 34 CFR part 668;
(vi) Meets the requirement of paragraphs (a)(4) and (a)(6), as applicable of this section;
(vii)(A) In the case of a Federal PLUS loan made on or after July 1, 1993, does not have an adverse credit history.
(B) For purposes of this section, the lender must obtain a credit report on each applicant from at least one national credit bureau. The credit report must be secured within a timeframe that would ensure the most accurate, current representation of the borrower's credit history before the first day of the period of enrollment for which the loan is intended.
(C) Unless the lender determines that extenuating circumstances existed, the lender must consider each applicant to have an adverse credit history based on the credit report if—
(
(
(D) Nothing in this paragraph precludes the lender from establishing more restrictive credit standards to determine whether the applicant has an adverse credit history.
(E) The absence of any credit history is not an indication that the applicant has an adverse credit history and is not to be used as a reason to deny a PLUS loan to that applicant.
(F) The lender must retain a record of its basis for determining that extenuating circumstances existed. This record may include, but is not limited to, an updated credit report, a statement from the creditor that the borrower has made satisfactory arrangements to repay the debt, or a satisfactory statement from the borrower explaining any delinquencies with outstanding balances of less than $500.
(viii) Obtains an endorser who has been determined not to have an adverse credit history as provided in paragraph (b)(1)(vii)(C) of this section.
(2) For purposes of paragraph (b)(1) of this section, a “parent” includes the individuals described in the definition of “parent” in 34 CFR 668.2 and the spouse of a parent who remarried, if that spouse's income and assets would have been taken into account when calculating a dependent student's expected family contribution.
(c)
(i) On the loans being consolidated—
(A) Is, at the time of application for a Consolidation loan—
(
(
(
(B) Not subject to a judgment secured through litigation, unless the judgment has been vacated; or
(C) Not subject to an order for wage garnishment under section 488A of the Act, unless the order has been lifted;
(ii) Certifies that no other application for a Consolidation loan is pending;
(iii) Agrees to notify the holder of any changes in address; and
(iv)(A) Certifies that the lender holds at least one outstanding loan that is being consolidated; or
(B) Applies to any eligible consolidation lender if the borrower—
(
(
(2) A married couple is eligible to receive a Consolidation loan in accordance with this section if each—
(i) Agrees to be held jointly and severally liable for the repayment of the total amount of the Consolidation loan;
(ii) Agrees to repay the debt regardless of any change in marital status; and
(iii) Meets the requirements of paragraph (c)(1) of this section, and only one must have met the requirements of paragraph (c)(1)(iv) of this section.
(d) A borrower's eligibility to receive a Consolidation loan terminates upon receipt of a Consolidation loan except that—
(1) Eligible loans received prior to the date a Consolidation loan was made and loans received during the 180-day period following the date a Consolidation loan was made, may be added to the Consolidation loan based on the borrower's request received by the lender during the 180-day period after the date the Consolidation loan was made;
(2) A borrower who receives an eligible loan after the date a Consolidation loan is made may receive a subsequent Consolidation loan; and
(3) A Consolidation loan borrower may consolidate an existing Consolidation loan only if the borrower has at least one other eligible loan made before or after the existing Consolidation loan that will be consolidated.
(e) In the case of a married couple, the loans of a spouse that are to be included in a Consolidation loan are considered eligible loans for the other spouse.
The charges that lenders may impose on borrowers, either directly or indirectly, are limited to the following:
(a)
(1)
(ii) If the borrower, on the date the promissory note evidencing the loan is signed, has no outstanding balance on any FFEL Program loan, and the first disbursement is made—
(A) Prior to October 1, 1992, for a loan covering a period of instruction beginning on or after July 1, 1988, the interest rate is 8 percent until 48 months elapse after the repayment period begins, and 10 percent thereafter; or
(B) On or after October 1, 1992, and prior to July 1, 1994, the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(
(
(iii) For a Stafford loan for which the first disbursement is made before October 1, 1992—
(A) If the borrower, on the date the promissory note is signed, has no outstanding balance on a Stafford loan but has an outstanding balance of principal or interest on a PLUS or SLS loan made for a period of enrollment beginning before July 1, 1988, or on a Consolidation loan that repaid a loan made for a period of enrollment beginning before July 1, 1988, the interest rate is 8 percent; or
(B) If the borrower, on the date the promissory note evidencing the loan is signed, has an outstanding balance of principal or interest on a PLUS or SLS loan made for a period of enrollment beginning on or after July 1, 1988, or on a Consolidation loan that repaid a loan made for a period of enrollment beginning on or after July 1, 1988, the interest rate is 8 percent until 48 months elapse after the repayment period begins, and 10 percent thereafter.
(iv) For a Stafford loan for which the first disbursement is made on or after October 1, 1992, but before December 20, 1993, if the borrower, on the date the promissory note evidencing the loan is signed, has no outstanding balance on a Stafford loan but has an outstanding balance of principal or interest on a PLUS, SLS, or Consolidation loan, the interest rate is 8 percent.
(v) For a Stafford loan for which the first disbursement is made on or after December 20, 1993 and prior to July 1,
(vi) For a Stafford loan for which the first disbursement is made on or after July 1, 1994 and prior to July 1, 1995, for a period of enrollment that includes or begins on or after July 1, 1994, the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 91-day Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.10; or
(B) 8.25 percent.
(vii) For a Stafford loan for which the first disbursement is made on or after July 1, 1995 and prior to July 1, 1998 the interest rate is a variable rate applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 91-day Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 2.5 percent during the in-school, grace and deferment period and 3.10 percent during repayment; or
(B) 8.25 percent.
(viii) For a Stafford loan for which the first disbursement is made on or after July 1, 1998, the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 91-day Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period plus 1.7 percent during the in-school, grace and deferment periods and 2.3 percent during repayment; or
(B) 8.25 percent.
(2)
(ii) For a loan disbursed on or after July 1, 1987 but prior to October 1, 1992, and for any loan made under § 682.209 (e) or (f), the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 52-week Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.25 percent; or
(B) 12 percent.
(iii) For a loan disbursed on or after October 1, 1992 and prior to July 1, 1994, the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 52-week Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.10 percent; or
(B) 10 percent.
(iv) For a loan for which the first disbursement is made on or after July 1, 1994 and prior to July 1, 1998, the interest rate is a variable rate applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 52-week Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.10 percent; or
(B) 9 percent.
(v) For a loan for which the first disbursement is made on or after July 1, 1998, the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 91-day Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.10 percent; or
(B) 9 percent.
(vi)(A) Beginning on July 1, 2001, the interest rate on the loans described in paragraphs (a)(2)(ii) through (iv) of this section is a variable rate applicable to each July 1-June 30, as determined on the preceding June 26, and is equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the last calendar week ending on or before such June 26; plus—
(
(
(B) The interest rates calculated under paragraph (a)(2)(vi)(A) of this section shall not exceed the limits specified in paragraphs (a)(2)(ii)(B), (a)(2)(iii)(B), and (a)(2)(iv)(B) of this section, as applicable.
(3)
(ii) For a loan disbursed on or after July 1, 1987 but prior to October 1, 1992, and for any loan made under § 682.209 (e) or (f), the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 52-week Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.25 percent; or
(B) 12 percent.
(iii) For a loan disbursed on or after October 1, 1992, the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 52-week Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.10 percent; or
(B) 11 percent.
(iv)(A) Beginning on July 1, 2001, the interest rate on the loans described in paragraphs (a)(3)(ii) and (iii) of this section is a variable rate applicable to each July 1-June 30, as determined on the preceding June 26, and is equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the last calendar week ending on or before such June 26; plus—
(
(
(B) The interest rates calculated under paragraph (a)(3)(iv)(A) of this section shall not exceed the limits specified in paragraphs (a)(3)(ii)(B) and (a)(3)(iii)(B) of this section, as applicable.
(4)
(A) The weighted average of interest rates on the loans consolidated, rounded to the nearest whole percent; or
(B) 9 percent.
(ii) A Consolidation loan made on or after July 1, 1994, for which the loan application was received by the lender before November 13, 1997, bears interest at the rate that is equal to the weighted average of interest rates on the loans consolidated, rounded upward to the nearest whole percent.
(iii) For a Consolidation loan for which the loan application was received by the lender on or after November 13, 1997 and before October 1, 1998, the interest rate for the portion of the loan that consolidated loans other than HEAL loans is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 91-day Treasury bills auctioned at the final auction held prior to June 1 of each year plus 3.10 percent; or
(B) 8.25 percent.
(iv) For a Consolidation loan for which the application was received by the lender on or after October 1, 1998, the interest rate for the portion of the loan that consolidated loans other than HEAL loans is a fixed rate that is the lesser of—
(A) The weighted average of interest rates on the loans consolidated, rounded to the nearest higher one-eighth of one percent; or
(B) 8.25 percent.
(v) For a Consolidation loan for which the application was received by the lender on or after November 13, 1997, the annual interest rate applicable to the portion of each consolidation loan that repaid HEAL loans is a variable rate adjusted annually on July 1 and must be equal to the average of the bond equivalent rates of the 91-day Treasury bills auctioned for the quarter ending June 30, plus 3 percent. There is no maximum rate on this portion of the loan.
(5)
(6)
(i) For a loan with an applicable interest rate of 10 percent made prior to July 23, 1992, and for a loan with an applicable interest rate of 10 percent made from July 23, 1992 through September 30, 1992, to a borrower with no outstanding FFEL Program loans—
(A) If during any calendar quarter, the sum of the average of the bond equivalent rates of the 91-day Treasury bills auctioned for that quarter, plus 3.25 percent, is less than 10 percent, the lender shall calculate an adjustment and credit the adjustment as specified under paragraph (a)(6)(i)(B) of this section if the borrower's account is not more than 30 days delinquent on December 31. The amount of the adjustment for a calendar quarter is equal to—
(
(
(
(B) No later than 30 calendar days after the end of the calendar year, the holder of the loan shall credit any amounts computed under paragraph (a)(6)(i)(A) of this section to—
(
(
(
(ii) For a fixed interest rate loan made on or after July 23, 1992 to a borrower with an outstanding FFEL Program loan—
(A) If during any calendar quarter, the sum of the average of the bond equivalent rates of the 91-day Treasury bills auctioned for that quarter, plus 3.10 percent, is less than the applicable interest rate, the lender shall calculate an adjustment and credit the adjustment to reduce the outstanding principal balance of the loan as specified under paragraph (a)(6)(ii)(C) of this section if the borrower's account is not more than 30 days delinquent on December 31. The amount of an adjustment for a calendar quarter is equal to—
(
(
(
(B) For any quarter or portion thereof that the Secretary was obligated to pay interest subsidy on behalf of the borrower, the holder of the loan shall refund to the Secretary, no later than the end of the following quarter, any excess interest calculated in accordance with paragraph (a)(6)(ii)(A) of this section;
(C) For any other quarter, the holder of the loan shall, within 30 days of the end of the calendar year, reduce the borrower's outstanding principal by the amount of excess interest calculated under paragraph (a)(6)(ii)(A) of this section, provided that the borrower's account was not more than 30 days delinquent as of December 31;
(D) For a borrower who on the last day of the calendar year is delinquent for more than 30 days, any excess interest calculated shall be refunded to the Secretary; and
(E) Notwithstanding paragraphs (a)(6)(ii)(B), (C) and (D) of this section, if the loan was disbursed during a quarter, the amount of any adjustment refunded to the Secretary or credited to the borrower for that quarter shall be prorated accordingly.
(7)
(i) A lender or holder shall convert the interest rate on a loan under paragraphs (a)(6)(i) or (ii) of this section to a variable rate.
(ii) The applicable interest rate for each 12-month period beginning on
(A) The bond equivalent rate of the 91-day Treasury bills auctioned at the final auction prior to June 1; and
(B) 3.25 percent in the case of a loan described in paragraph (a)(6)(i) of this section or 3.10 percent in the case of a loan described in paragraph (a)(6)(ii) of this section.
(iii)(A) In connection with the conversion specified in paragraph (a)(6)(ii) of this section for any period prior to the conversion for which a rebate has not been provided under paragraph (a)(6) of this section, a lender or holder shall convert the interest rate to a variable rate.
(B) The interest rate for each period shall be reset quarterly and the applicable interest rate for the quarter or portion shall equal the sum of—
(
(
(iv)(A) The holder of a loan being converted under paragraph (a)(7)(iii)(A) of this section shall complete such conversion on or before January 1, 1995.
(B) The holder shall, not later than 30 days prior to the conversion, provide the borrower with—
(
(
(
(
(v) The notice may be provided as part of the disclosure requirement as specified under § 682.205.
(vi) The interest rate as calculated under this paragraph may not exceed the maximum interest rate applicable to the loan prior to the conversion.
(b)
(2) Except as provided in paragraph (b)(4) of this section, a lender may capitalize interest payable by the borrower that has accrued—
(i) For the period from the date the first disbursement was made to the beginning date of the in-school period;
(ii) For the in-school or grace periods, or for a period needed to align repayment of an SLS with a Stafford loan, if capitalization is expressly authorized by the promissory note (or with the written consent of the borrower);
(iii) For a period of authorized deferment;
(iv) For a period of authorized forbearance; or
(v) For the period from the date the first installment payment was due until it was made.
(3) A lender may capitalize accrued interest under paragraphs (b)(2)(ii) through (iv) of this section no more frequently than quarterly. Capitalization is again permitted when repayment is required to begin or resume. A lender may capitalize accrued interest under paragraph (b)(2) (i) and (v) of this section only on the date repayment of principal is scheduled to begin.
(4)(i) For unsubsidized Stafford loans disbursed on or after October 7, 1998 and prior to July 1, 2000, the lender may capitalize the unpaid interest that accrues on the loan according to the requirements of section 428H(e)(2) of the Act.
(ii) For Stafford loans first disbursed on or after July 1, 2000, the lender may capitalize the unpaid interest—
(A) When the loan enters repayment;
(B) At the expiration of a period of authorized deferment;
(C) At the expiration of a period of authorized forbearance; and
(D) When the borrower defaults.
(5) For any borrower in an in-school or grace period or the period needed to align repayment, deferment, or forbearance status, during which the Secretary does not pay interest benefits and for which the borrower has agreed to make payments of interest, the
(c)
(2)(i) A lender may charge a lower origination fee than the amount specified in paragraph (c)(1) of this section to a borrower whose expected family contribution (EFC), used to determine eligibility for the loan, is equal to or less than the maximum qualifying EFC for a Federal Pell Grant at the time the loan is certified or to a borrower who qualifies for a subsidized Stafford loan. A lender must charge all such borrowers the same origination fee.
(ii) With the approval of the Secretary, a lender may use a standard comparable to that defined in paragraph (c)(2)(i) of this section.
(3) If a lender charges a lower origination fee on unsubsidized loans under paragraph (c)(1) or (c)(2) of this section, the lender must charge the same fee on subsidized loans.
(4)(i) For purposes of this paragraph (c), a lender is defined as:
(A) All entities under common ownership, including ownership by a common holding company, that make loans to borrowers in a particular state; and
(B) Any beneficial owner of loans that provides funds to an eligible lender trustee to make loans on the beneficial owner's behalf in a particular state.
(ii) If a lender as defined in paragraph(c)(4)(i) charges a lower origination fee to any borrower in a particular state under paragraphs (c)(1) or (c)(2) of this section, the lender must charge all such borrowers who reside in that state or attend school in that state the same origination fee.
(5) Shall charge a borrower an origination fee on a PLUS loan of 3 percent of the principal amount of the loan;
(6) Shall deduct a pro rata portion of the fee (if charged) from each disbursement; and
(7) Shall refund by a credit against the borrower's loan balance the portion of the origination fee previously deducted from the loan that is attributable to any portion of the loan—
(i) That is returned by a school to a lender in order to comply with the Act or with applicable regulations;
(ii) That is repaid or returned within 120 days of disbursement, unless—
(A) The borrower has no FFEL Program loans in repayment status and has requested, in writing, that the repaid or returned funds be used for a different purpose; or
(B) The borrower has a FFEL Program loan in repayment status, in which case the payment is applied in accordance with § 682.209(b) unless the borrower has requested, in writing, that the repaid or returned funds be applied as a cancellation of all or part of the loan;
(iii) For which a loan check has not been negotiated within 120 days of disbursement; or
(iv) For which loan proceeds disbursed by electronic funds transfer or master check in accordance with § 682.207(b)(1)(ii) (B) and (C) have not been released from the restricted account maintained by the school within 120 days of disbursement.
(d)
(e)
(f)
(2) The lender may require the borrower to pay a late charge if the borrower fails to pay all or a portion of a required installment payment within 15 days after it is due.
(g)
(i) Attorney's fees;
(ii) Court costs; and
(iii) Telegrams.
(2) The costs referred to in paragraph (g)(1) of this section may not include routine collection costs associated with preparing letters or notices or with making personal contacts with the borrower (e.g., local and long-distance telephone calls).
(h)
(a)
(b)
(a)
(i) $2,625 for a program of study of at least a full academic year in length.
(ii) For a one-year program of study with less than a full academic year remaining, the amount that is the same ratio to $2,625 as the—
(iii) For a program of study that is less than a full academic year in length, the amount that is the same ratio to $2,625 as the lesser of the—
(2) In the case of a student who has successfully completed the first year of an undergraduate program but has not successfully completed the second year of an undergraduate program, the total amount the student may borrow for any academic year of study under the Stafford Loan Program in combination with the Federal Direct Stafford/Ford Loan Program may not exceed the following:
(i) $3,500 for a program whose length is at least a full academic year in length.
(ii) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $3,500 as the—
(3) In the case of an undergraduate student who has successfully completed the first and second years of a program of study of undergraduate education but has not successfully completed the remainder of the program, the total amount the student may borrow for any academic year of study under the Stafford Loan Program in combination with the Federal Direct Stafford/Ford Loan Program may not exceed the following:
(i) $5,500 for a program whose length is at least an academic year in length.
(ii) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $5,500 as the—
(4) In the case of a student who has an associate or baccalaureate degree that is required for admission into a program and who is not a graduate or professional student, the total amount the student may borrow for any academic year of study may not exceed the amounts in paragraph (a)(3) of this section.
(5) In the case of a graduate or professional student, the total amount the student may borrow for any academic year of study under the Stafford Loan Program, in combination with any amount borrowed under the Federal Direct Stafford/Ford Loan Program, may not exceed $8,500.
(6) In the case of a student enrolled for no longer than one consecutive 12-month period in a course of study necessary for enrollment in a program leading to a degree or certificate, the total amount the student may borrow for any academic year of study under the Stafford Loan Program in combination with the Federal Direct Stafford/Ford Loan Program may not exceed the following:
(i) $2,625 for coursework necessary for enrollment in an undergraduate degree or certificate program.
(ii) $5,500 for coursework necessary for enrollment in a graduate or professional degree or certificate program for a student who has obtained a baccalaureate degree.
(7) In the case of a student who has obtained a baccalaureate degree and is enrolled or accepted for enrollment in coursework necessary for a professional credential or certification from a State that is required for employment as a teacher in an elementary or secondary school in that State, the total amount the student may borrow for any academic year of study under the Stafford Loan Program in combination with the Federal Direct Stafford/Ford Loan Program may not exceed $5,500.
(8) Except as provided in paragraph (a)(4) of this section, an undergraduate
(9) Except as provided in paragraph (a)(4) of this section—
(i) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has not successfully completed the first year of that program may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (a)(1) of this section.
(ii) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has successfully completed the first year of that program, but has not successfully completed the second year of the program, may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (a)(2) of this section.
(b)
(1) $23,000 in the case of any student who has not successfully completed a program of study at the undergraduate level.
(2) $65,500, in the case of a graduate or professional student, including loans for undergraduate study.
(c)
(2) In the case of an independent undergraduate student, a graduate or professional student, or certain dependent undergraduate students under the conditions specified in § 682.201(a)(3), the total amount the student may borrow for any period of enrollment under the Unsubsidized Stafford Loan and Federal Direct Unsubsidized Stafford/Ford Loan programs may not exceed the amounts determined under paragraph (a) of this section less any amount received under the Federal Stafford Loan Program or the Federal Direct Stafford/Ford Loan Program, in combination with the amounts determined under paragraph (d) of this section.
(d)
(1) In the case of a student who has not successfully completed the first year of a program of undergraduate education, may not exceed the following:
(i) $4,000 for a program of study of at least a full academic year.
(ii) For a one-year program of study with less than a full academic year remaining, the amount that is the same ratio to $4,000 as the—
(iii) For a program of study that is less than a full academic year in length, an amount that is the same ratio to $4,000 as the lesser of—
(2) In the case of a student who has completed the first year of a program of undergraduate education but has not successfully completed the second year of a program of undergraduate education may not exceed the following:
(i) $4,000 for a program of study of at least a full academic year in length.
(ii) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $4,000 as the—
(3) In the case of a student who has successfully completed the second year of a program of undergraduate education, but has not completed the remainder of the program, may not exceed the following:
(i) $5,000 for a program of study of at least a full academic year.
(ii) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $5,000 as the—
(4) In the case of a student who has an associate or baccalaureate degree that is required for admission into a program and who is not a graduate or professional student, the total amount the student may borrow for any academic year of study may not exceed the amounts in paragraph (d)(3) of this section.
(5) In the case of a graduate or professional student, may not exceed $10,000.
(6) In the case of a student enrolled for no longer than one consecutive 12-month period in a course of study necessary for enrollment in a program leading to a degree or a certificate may not exceed the following:
(i) $4,000 for coursework necessary for enrollment in an undergraduate degree or certificate program.
(ii) $5,000 for coursework necessary for enrollment in a graduate or professional degree or certificate program for a student who has obtained a baccalaureate degree.
(iii) In the case of a student who has obtained a baccalaureate degree and is enrolled or accepted for enrollment in a program necessary for a professional credential or a certification from a State that is required for employment as a teacher in an elementary or secondary school in that State, $5,000.
(7) Except as provided in paragraph (d)(4) of this section, an undergraduate student who is enrolled in a program that is one academic year or less in length may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (d)(1) of this section.
(8) Except as provided in paragraph (d)(4) of this section—
(i) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has not successfully completed the first year of that program may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (d)(1) of this section.
(ii) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has successfully completed the first year of that program, but has not successfully completed the second year of the program, may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (d)(2) of this section.
(e)
(1) $46,000 for an undergraduate student.
(2) $138,500 for a graduate or professional student.
(f)
(i) $2,500 for a student enrolled in a program whose length is at least two-thirds of an academic year but less than a full academic year in length;
(ii) $1,500 for a student enrolled in a program whose length is less than two-thirds of an academic year in length; and
(iii) $0 for a student enrolled in a program whose length is less than one-third of an academic year in length.
(2) In the case of a loan for which a first disbursement is made on or after July 1, 1993, the total amount a student may borrow for an academic year under the SLS program—
(i) In the case of a student who has not successfully completed the first and second year of a program of undergraduate education, may not exceed the following—
(A) $4,000 for enrollment in a program whose length is at least a full academic year in length;
(B) $2,500 for enrollment in a program whose length is at least two-thirds but less than a full academic year in length;
(C) $1,500 for enrollment in a program whose length is at least one-third but less than two-thirds of an academic year in length;
(ii) Except as provided in paragraph (f)(3) of this section, in the case of a student who successfully completed the first and second year of an undergraduate program, but has not completed the remainder of the program, may not exceed the following—
(A) $5,000 for enrollment in a program whose length is at least a full academic year;
(B) $3,325 for enrollment in a program whose length is at least two-thirds of an academic year but less than a full academic year in length; or
(C) $1,675 for enrollment in a program whose length is at least one-third of an academic year but less than two-thirds of an academic year; and
(iii) In the case of a graduate or professional student, may not exceed $10,000.
(3) For a period of enrollment beginning after October 1, 1993, but prior to July 1, 1994 for which the first disbursement is made prior to July 1, 1994, in the case of a student who has successfully completed the first and second years of a program but has not successfully completed the remainder of a program of undergraduate education—
(i) $5,000; or
(ii) If the student is enrolled in a program, the remainder of which is less than a full academic year, the maximum annual amount that the student may receive may not exceed the amount that bears the same ratio to the amount in paragraph (f)(3)(i) of this section as the remainder measured in semester, trimester, quarter, or clock hours bears to one academic year.
(g)
(1) An undergraduate student may not exceed—
(i) $20,000, for loans for which the first disbursement is made prior to July 1, 1993; or
(ii) $23,000, for loans for which the first disbursement was made on or after July 1, 1993; and
(2) A graduate student may not exceed—
(i) $20,000, for loans for which the first disbursement is made prior to July 1, 1993; or
(ii) $73,000, for loans for which the first disbursement was made on or after July 1, 1993 including loans for undergraduate study.
(h)
(i)
(j)
(k)
(1) The student's estimated financial assistance for that period; and
(2) The borrower's expected family contribution for that period, in the case of a Stafford loan that is eligible for interest benefits.
(l) In determining a Stafford loan amount in accordance with § 682.204 (a), (c) and (d), the school must use the definition of academic year in 34 CFR 668.3.
(a)
(2) The lender shall provide the borrower with—
(i) The lender's name;
(ii) A toll-free telephone number accessible from within the United States that the borrower can use to obtain additional loan information;
(iii) The address to which correspondence with the lender and payments should be sent;
(iv) Notice that the lender may sell or transfer the loan to another party and, if it does, that the address and identity of the party to which correspondence and payments should be sent may change;
(v) The principal amount of the loan;
(vi) The amount of any charges, including the origination fee if applicable, and the insurance premium, to be collected by the lender before or at the time of each disbursement on the loan, and an explanation of whether those charges are to be deducted from the proceeds of the loan or paid separately by the borrower;
(vii) The actual interest rate;
(viii) The annual and aggregate maximum amounts that may be borrowed;
(ix) A statement that information concerning the loan, including the date of disbursement and the amount of the loan, will be reported to a national credit bureau;
(x) An explanation of when repayment of the loan is required and when the borrower is required to pay the interest that accrues on the loan;
(xi) The minimum and maximum number of years in which the loan must be repaid and the minimum amount of required annual payments;
(xii) An explanation of any special options the borrower may have for consolidating or refinancing the loan;
(xiii) A statement that the borrower has the right to prepay all or part of the loan at any time, without penalty;
(xiv) A statement describing the circumstances under which repayment of the loan or interest that accrues on the loan may be deferred;
(xv) A statement of availability of the Department of Defense program for repayment of loans on the basis of military service, as provided for in 10 U.S.C. 2171;
(xvi) The definition of “default” found in § 682.200, and the consequences to the borrower of a default, including a statement concerning likely litigation, a statement that the default will be reported to a national credit bureau, and statements that the borrower will be liable for substantial collection costs, that the borrower's Federal and State income tax refund may be withheld to pay the debt, that the borrower's wages may be garnished or offset, and that the borrower will be ineligible for additional Federal student financial aid, as well as for assistance under most Federal benefit programs;
(xvii) An explanation of the possible effects of accepting the loan on the student's eligibility for other forms of student financial assistance;
(xviii) An explanation of any costs the borrower may incur in the making or collection of the loan; and
(xix) In the case of a Stafford or SLS loan, other than an SLS loan made under § 682.209 (e) or (f) or a loan made to a borrower attending a school that is not in a State, a statement that the loan proceeds will be transmitted to the school for delivery to the borrower; and
(xx) A statement of the total cumulative balance, including the loan applied for, owed to that lender, and an estimate of, or information that will allow the borrower to estimate, the projected monthly payment amount based on that cumulative outstanding balance.
(3) With the exception of paragraphs (a)(2)(i) through (a)(2)(iii), (a)(2)(v) through (a)(2)(vii), and (a)(2)(xx) of this section, a lender's disclosure requirements are met if it provides the borrower with either—
(i) The borrower's rights and responsibilities statement approved by the Secretary under paragraph (b) of this section; or
(ii) The plain language disclosure approved by the Secretary under paragraph (g) of this section for subsequent loans made under a Master Promissory Note.
(b)
(c)
(2) The lender shall provide the borrower with—
(i) The lender's name, a toll-free telephone number accessible from within the United States that the borrower can use to obtain additional loan information, and the address to which correspondence with the lender and payments should be sent;
(ii) The scheduled date the repayment period is to begin;
(iii) The estimated balance, including the estimated amount of interest to be capitalized, owed by the borrower as of the date upon which the repayment period is to begin, or the date of the disclosure, whichever is later;
(iv) The actual interest rate on the loan;
(v) An explanation of any fees that may accrue or be charged to the borrower during the repayment period;
(vi) The borrower's repayment schedule, including the due date of the first installment and the number, amount, and frequency of payments;
(vii) Except in the case of a Consolidation loan, an explanation of any special options the borrower may have for consolidating or refinancing the loan and of the availability and terms of such other options;
(viii) The estimated total amount of interest to be paid on the loan, assuming that payments are made in accordance with the repayment schedule; and
(ix) A statement that the borrower has the right to prepay all or part of the loan at any time, without penalty.
(d)
(e)
(f)
(g)
(h)
(i) That the borrower is eligible for income-sensitive repayment, including through loan consolidation;
(ii) Of the procedures by which the borrower can elect income-sensitive repayment; and
(iii) Of where and how the borrower may obtain more information concerning income-sensitive repayment.
(2) The promissory note and associated materials approved by the Secretary satisfy the loan origination notice requirements provided for in paragraph (h)(1) of this section.
(a)
(2) A lender that delegates substantial loan-making duties to a school on a loan thereby enters into a loan origination relationship with the school in regard to that loan. If that relationship exists, the lender may rely in good faith upon statements of the borrower made in the loan application process, but may not rely upon statements made by the school in that process. A non-school lender that does not have an origination relationship with a school with respect to a loan may rely in good faith upon statements of both the borrower and the school in the loan application process. Except as provided in 34 CFR part 668, subpart E, a school lender may rely in good faith upon statements made by the borrower in the loan application process.
(b)
(c)
(2) Except in the case of a Consolidation loan, in determining the amount of the loan to be made, in no case may the loan amount exceed the lesser of the amount the borrower requests, the amount certified by the school under § 682.603, or the loan limits under § 682.204.
(d)(1) The lender must ensure that each loan is supported by an executed legally-enforceable promissory note as proof of the borrower's indebtedness.
(e)
(2) A Federal PLUS Program Loan may be made to an eligible borrower with an endorser who is secondarily liable for repayment of the loan.
(3) A Federal Consolidation loan may be made to two eligible spouses provided both borrowers agree to be jointly and severally liable for repayment of the loan as co-makers.
(f)
(i) The loan is a legal, valid, and binding obligation of the borrower;
(ii) The loan was made and serviced in compliance with applicable laws and regulations; and
(iii) In the case of a FFEL loan, that the guarantee on the loan is in full force and effect.
(2) The Consolidation loan lender may rely in good faith on the certification provided under paragraph (f)(1)
(a)(1) This section prescribes procedures for lenders to follow in disbursing Stafford and PLUS loans. This section does not prescribe procedures for a refinanced SLS or PLUS Program loan made under § 682.209 (e) or (f). With respect to FISL and Federal PLUS loans, references to the “guaranty agency” in this section shall be understood to refer to the “Secretary.”
(2) The requirements of paragraphs (b)(1) (ii) and (v) of this section must be satisfied either by the lender or by an escrow agent with which the lender has an agreement pursuant to § 682.408. The lender shall comply with paragraph (b)(1)(iii) of this section whether or not it disburses to an escrow agent.
(b)(1) In disbursing a loan, a lender—
(i)(A) May not disburse loan proceeds prior to the issuance of the guarantee commitment for the loan by the guaranty agency, except with the agency's prior approval; and
(B) Must disburse a Stafford or PLUS loan in accordance with the disbursement schedule provided by the school or any request made by the school modifying that schedule.
(ii) Shall disburse loan proceeds by—
(A) A check that is made payable to the borrower, or that is made co-payable to the borrower and the school for attendance at which the loan is intended, and requires the personal endorsement or other written certification of the borrower in order to be cashed or deposited in an account of the borrower at a financial institution;
(B) If authorized by the guarantor, electronic funds transfer to an account maintained in accordance with § 668.163 by the school as trustee for the lender, the guaranty agency, the Secretary, and the borrower, that requires the approval of the borrower. A disbursement made by electronic funds transfer must be accompanied by a list of the names, social security numbers, and loan amounts of the borrowers who are receiving a portion of the disbursement; or
(C) If the school and the lender agree, a master check from the lender to the institution of higher education to a account maintained in accordance with § 688.163 by the school as trustee for the lender. A disbursement made by a master check must be accompanied by a list of the names, social security numbers, and loan amounts of the borrowers who are receiving a portion of the disbursement;
(iii) May not disburse loan proceeds earlier than is reasonably necessary to meet the student's cost of attendance for the period for which the loan is made, and, in no case without the Secretary's prior approval, disburse loan proceeds earlier than 30 days prior to the date on which the student is scheduled to enroll;
(vi) Except as provided in paragraph (f) of this section, may not disburse a second or subsequent disbursement of a Federal Stafford loan to a student who has ceased to be enrolled; and
(v) Shall disburse—
(A) Except as provided in paragraph (b)(1)(v) (C)(
(B) In the case of a Federal PLUS loan—
(
(
(
(C) In the case of a student enrolled in a study-abroad program approved for credit at the home institution in which the student is enrolled, if the student requests—
(
(
(D) In the case of a student enrolled in an eligible foreign school, if the student requests—
(
(
(E) If a lender disburses a loan directly to the borrower for attendance at an eligible foreign school, as provided in paragraph (b)(1)(v)(D)(
(
(
(
(
(
(
(vi) Except as provided in paragraph (f)(1) of this section, may not disburse a second or subsequent disbursement of a Federal Stafford loan to a student who has ceased to be enrolled; and
(vii) May disburse a second or subsequent disbursement of an FFEL loan, at the request of the school, even if the borrower or the school returned the prior disbursement, unless the lender has information that the student is no longer enrolled.
(c) Except as provided in paragraph (e) of this section, a lender must disburse any Stafford or PLUS loan in accordance with the disbursement schedule provided by the school as follows:
(1) Disbursement must be in two or more installments.
(2) No installment may exceed one-half of the loan.
(3) Disbursement must be made on a payment period basis in accordance with the disbursement schedule provided by the school or any request made by the school modifying that schedule.
(d) If one or more scheduled disbursements have elapsed before a lender makes a disbursement and the student is still enrolled, the lender may include in the disbursement loan proceeds for previously scheduled, but unmade, disbursements.
(e) A lender must disburse the loan in one installment if the school submits a schedule for disbursement of loan proceeds in one installment as authorized by § 682.604(c)(10).
(f) A lender may disburse loan proceeds after the student has ceased to be enrolled on at least a half-time basis only if—
(1) The school certified the borrower's loan eligibility before the date the student became ineligible and the loan funds will be used to pay educational costs that the school determines the student incurred for the period in which the student was enrolled and eligible;
(2) The student completed the first 30 days of his or her program of study if the student was a first-year, first-time borrower as described in § 682.604(c)(5); and
(3) In the case of a second or subsequent disbursement, the student graduated or successfully completed the period of enrollment for which the loan was intended.
(a) The loan servicing process includes reporting to national credit bureaus, responding to borrower inquiries, and establishing the terms of repayment.
(b)(1) An eligible lender of a FFEL loan shall report to at least one national credit bureau—
(i) The total amount of FFEL loans the lender has made to the borrower, within 90 days of each disbursement;
(ii) The outstanding balance of the loans;
(iii) Information concerning the repayment status of the loan, no less frequently than every 90 days or quarterly after a change in that status from current to delinquent;
(iv) The date the loan is fully repaid by, or on behalf of, the borrower, or discharged by reason of the borrower's death, bankruptcy, or total and permanent disability, within 90 days after that date;
(v) Other information required by law to be reported.
(2) An eligible lender that has acquired a FFEL loan shall report to at least one national credit bureau the information required by paragraph (b)(1)(ii)-(v) of this section within 90 days of its acquisition of the loan.
(c)(1) A lender shall respond within 30 days after receipt to any inquiry from a borrower or any endorser on a loan.
(2) When a lender learns that a Stafford loan borrower is no longer enrolled at an institution of higher education on at least a half-time basis, the lender shall promptly contact the borrower in order to establish the terms of repayment.
(3)(i) If the borrower disputes the terms of the loan in writing and the lender does not resolve the dispute, the lender's response must provide the borrower with an appropriate contact at the guaranty agency for the resolution of the dispute.
(ii) If the guaranty agency does not resolve the dispute, the agency's response must provide the borrower with information on the availability of the Student Loan Ombudsman's office.
(d) Subject to the rules regarding maximum duration of a repayment period and minimum annual payment described in § 682.209(a)(7), (c), and (h), nothing in this part is intended to limit a lender's discretion in establishing, or, with the borrower's consent, revising a borrower's repayment schedule—
(1) To provide for graduated or income-sensitive repayment terms. The Secretary strongly encourages lenders to provide a graduated or income-sensitive repayment schedule to a borrower providing for at least the payment of interest charges, unless the borrower requests otherwise, in order to make the borrower's repayment burden commensurate with his or her projected ability to pay; or
(2) To provide a single repayment schedule for all FFEL program loans to the borrower held by the lender.
(e)(1) If the assignment of a Stafford, PLUS, SLS, or Consolidation loan is to result in a change in the identity of the party to whom the borrower must send subsequent payments, the assignor and assignee of the loan shall, no later than 45 days from the date the assignee acquires a legally enforceable right to receive payment from the borrower on the assigned loan, provide, either jointly or separately, a notice to the borrower of—
(i) The assignment;
(ii) The identity of the assignee;
(iii) The name and address of the party to whom subsequent payments or communications must be sent; and
(iv) The telephone numbers of both the assignor and the assignee.
(2) If the assignor and assignee separately provide the notice required by
(3) For purposes of this paragraph, the term “assigned” is defined in § 682.401(b)(17)(ii).
(4) The assignee, or the assignor on behalf of the assignee, shall notify the guaranty agency that guaranteed the loan within 45 days of the date the assignee acquires a legally enforceable right to receive payment from the borrower on the loan of—
(i) The assignment; and
(ii) The name and address of the assignee, and the telephone number of the assignee that can be used to obtain information about the repayment of the loan.
(5) The requirements of this paragraph (e), as to borrower notification, apply if the borrower is in a grace period or has entered the repayment period.
(f)(1) Notwithstanding an error by the school or lender, a lender shall follow the procedures in § 682.412 whenever it receives information that can be substantiated that the borrower, or the student on whose behalf a parent has borrowed, provided false or erroneous information or took actions that caused the student or borrower—
(i) To be ineligible for all or a portion of a loan made under this part;
(ii) To receive a Stafford loan subject to payment of Federal interest benefits as provided under § 682.301, for which he or she was ineligible; or
(iii) To receive loan proceeds that were not paid to the school or repaid to the lender by or on behalf of a registered student who—
(A) The school notifies the lender under § 682.604(d)(4) has withdrawn or been expelled prior to the first day of classes for the period of enrollment for which the loan was intended; or
(B) Failed to attend school during that period.
(2) For purposes of this section, the term “guaranty agency” in § 682.412(e) refers to the Secretary in the case of a Federal GSL loan.
(g) If, during a period when the borrower is not delinquent, a lender receives information indicating it does not know the borrower's address, it may commence the skip-tracing activities specified in § 682.411(g).
(h)
(a)
(2)(i) For a PLUS loan, the repayment period begins on the date of the last disbursement made on the loan. Interest accrues and is due and payable from the date of the first disbursement of the loan. The first payment is due within 60 days after the date the loan is fully disbursed.
(ii) For an SLS loan, the repayment period begins on the date the loan is disbursed, or, if the loan is disbursed in multiple installments, on the date of the last disbursement of the loan. Interest accrues and is due and payable from the date of the first disbursement of the loan. Except as provided in paragraph (a)(2)(iii), (a)(2)(iv), and (a)(2)(v) of this section the first payment is due within 60 days after the date the loan is fully disbursed.
(iii) For an SLS borrower who has not yet entered repayment on a Stafford loan, the borrower may postpone
(iv) If the lender first learns after the fact that an SLS borrower has entered the repayment period, the repayment begins no later than 75 days after the date the lender learns that the borrower has entered the repayment period.
(v) The lender may establish a first payment due date that is no more than an additional 30 days beyond the period specified in paragraphs (a)(2)(i)—(a)(2)(iv) of this section in order for the lender to comply with the required deadline contained in § 682.205(c)(1).
(3)(i) Except as provided in paragraphs (a)(4) and (5) of this section, for a Stafford loan the repayment period begins—
(A) For a borrower with a loan for which the applicable interest rate is 7 percent per year, not less than 9 nor more than 12 months following the date on which the borrower is no longer enrolled on at least a half-time basis at an eligible school. The length of this grace period is determined by the lender for loans made under the FISL Program, and by the guaranty agency for loans guaranteed by the agency;
(B) For a borrower with a loan for which the initial applicable interest rate is 8 or 9 percent per year, the day after 6 months following the date on which the borrower is no longer enrolled on at least a half-time basis at an institution of higher education; and
(C) For a borrower with a loan with a variable interest rate, the day after 6 months following the date on which the borrower is no longer enrolled on at least a half-time basis at an institution of higher education.
(ii) The first payment on a Stafford loan is due on a date established by the lender that is no more than—
(A) 60 days following the first day that the repayment period begins;
(B) 60 days from the expiration of a deferment or forbearance period unless the borrower during this period has submitted payments with instructions that those payments are intended for future installment payments;
(C) 60 days following the end of the post deferment grace period;
(D) If the lender first learns after the fact that the borrower has entered the repayment period, no later than 75 days after the date the lender learns that the borrower has entered the repayment period; or
(E) An additional 30 days beyond the periods specified in paragraphs (a)(3)(ii)(A)-(a)(3)(ii)(D) of this section in order for the lender to comply with the required deadlines contained in § 682.205(c)(1).
(iii) When determining the date that the student was no longer enrolled on at least a half-time basis, the lender must use a new date it receives from a school, unless the lender has already disclosed repayment terms to the borrower and the new date is within the same month and year as the most recent date reported to the lender.
(4) For a borrower of a Stafford loan who is a correspondence student, the grace period specified in paragraph (a)(3)(i) of this section begins on the earliest of—
(i) The day after the borrower completes the program;
(ii) The day after withdrawal as determined pursuant to 34 CFR 668.22; or
(iii) 60 days following the last day for completing the program as established by the school.
(5) For a Stafford loan, the repayment period begins prior to the end of the grace period if the borrower requests in writing and is granted a repayment schedule that so provides. In this event, a borrower waives the remainder of the grace period.
(6) For purposes of establishing the beginning of the repayment period for Stafford and SLS loans, the grace periods referenced in paragraphs (a)(2)(iii) and (a)(3)(i) of this section exclude any period during which a borrower who is a member of a reserve component of the Armed Forces named in section 10101 of title 10, United States Code is called or ordered to active duty for a period of more than 30 days. Any single excluded period may not exceed three years and includes the time necessary for the borrower to resume enrollment at the next available regular enrollment period. Any Stafford or SLS borrower who is in a grace period when called or ordered to active duty as specified in this paragraph is entitled
(7)(i) The repayment schedule may provide for substantially equal installment payments or for installment payments that increase or decrease in amount during the repayment period. If the loan has a variable interest rate that changes annually, the lender may establish a repayment schedule that—
(A) Provides for adjustments of the amount of the installment payment to reflect annual changes in the variable interest rate; or
(B) Contains no provision for an adjustment of the amount of the installment payment to reflect annual changes in the variable interest rate, but requires the lender to grant a forbearance to the borrower (or endorser, if applicable) for a period of up to 3 years of payments in accordance with § 682.211(i)(5) in cases where the effect of a variable interest rate on a standard or graduated repayment schedule would result in a loan not being repaid within the maximum repayment term.
(ii) If a graduated or income-sensitive repayment schedule is established, it may not provide for any single installment that is more than three times greater than any other installment. An agreement as specified in paragraph (c)(1)(ii) of this section is not required if the schedule provides for less than the minimum annual payment amount specified in paragraph (c)(1)(i) of this section.
(iii) Not more than six months prior to the date that the borrower's first payment is due, the lender must offer the borrower a choice of a standard, income-sensitive, graduated, or, if applicable, an extended repayment schedule.
(iv) The repayment schedule must require that each payment equal at least the interest that accrues during the interval between scheduled payments.
(v) The lender shall require the borrower to repay the loan under a standard repayment schedule described in paragraph (a)(7)(vi) of this section if the borrower—
(A) Does not select an income-sensitive, a graduated, or if applicable, an extended repayment schedule within 45 days after being notified by the lender to choose a repayment schedule; or
(B) Chooses an income-sensitive repayment schedule, but does not provide the documentation requested by the lender under paragraph (a)(7)(viii)(C) of this section within the time period specified by the lender.
(vi) Under a standard repayment schedule, the borrower is scheduled to pay either—
(A) The same amount for each installment payment made during the repayment period, except that the borrower's final payment may be slightly more or less than the other payments; or
(B) An installment amount that will be adjusted to reflect annual changes in the loan's variable interest rate.
(vii) Under a graduated repayment schedule—
(A)(
(
(B) An agreement as specified in paragraph (c)(1)(ii) of this section is not required if the schedule provides for less than the minimum annual payment amount specified in paragraph (c)(1)(i) of this section.
(viii) Under an income-sensitive repayment schedule—
(A)(
(
(B) In general, the lender shall request the borrower to inform the lender of his or her income no earlier than 90 days prior to the due date of the borrower's initial installment payment
(C) If the borrower reports income to the lender that the lender considers to be insufficient for establishing monthly installment payments that would repay the loan within the applicable maximum repayment period, the lender shall require the borrower to submit evidence showing the amount of the most recent total monthly gross income received by the borrower from employment and from other sources including, if applicable, pay statements from employers and documentation of any income received by the borrower from other parties;
(D) The lender shall grant a forbearance to the borrower (or endorser, if applicable) for a period of up to 5 years of payments in accordance with § 682.211(i)(5) in cases where the effect of decreased installment amounts paid under an income-sensitive repayment schedule would result in a loan not being repaid within the maximum repayment term; and
(E) The lender shall inform the borrower that the loan must be repaid within the time limits specified under paragraph (a)(8) of this section.
(ix) Under an extended repayment schedule, a new borrower whose total outstanding principal and interest in FFEL loans exceed $30,000 may repay the loan on a fixed annual repayment amount or a graduated repayment amount for a period that may not exceed 25 years. For purposes of this section, a “new borrower” is an individual who has no outstanding principal or interest balance on an FFEL Program loan as of October 7, 1998, or on the date he or she obtains an FFEL Program loan after October 7, 1998.
(x) A borrower may request a change in the repayment schedule on a loan. The lender must permit the borrower to change the repayment schedule no less frequently than annually.
(xi) For purposes of this section, a lender shall, to the extent practicable require that all FFEL loans owed by a borrower to the lender be combined into one account and repaid under one repayment schedule. In that event, the word “loan” in this section shall mean all of the borrower's loans that were combined by the lender into that account.
(8)(i) Subject to paragraphs (a)(8)(ii) through (iv) of this section, and except as provided in paragraph (a)(7)(ix) a lender shall allow a borrower at least 5 years, but not more than 10 years, or 25 years under an extended repayment plan to repay a Stafford, SLS, or PLUS loan, calculated from the beginning of the repayment period. Except in the case of a FISL loan for a period of enrollment beginning on or after July 1, 1986, the lender shall require a borrower to fully repay a FISL loan within 15 years after it is made.
(ii) If the borrower receives an authorized deferment or is granted forbearance, as described in § 682.210 or § 682.211 respectively, the periods of deferment or forbearance are excluded from determinations of the 5-, 10-, and 15- and 25-year periods, and from the 10-, 12-, 15-, 20-, 25-, and 30-year periods for repayment of a Consolidation loan pursuant to § 682.209(h).
(iii) If the minimum annual repayment required in paragraph (c) of this section would result in complete repayment of the loan in less than 5 years, the borrower is not entitled to the full 5-year period.
(iv) The borrower may, prior to the beginning of the repayment period, request and be granted by the lender a repayment period of less than 5 years. Subject to paragraph (a)(8)(iii) of this section, a borrower who makes such a request may notify the lender at any time to extend the repayment period to a minimum of 5 years.
(9) If, with respect to the aggregate of all loans held by a lender, the total payment made by a borrower for a monthly or similar payment period would not otherwise be a multiple of five dollars, the lender may round that periodic payment to the next highest whole dollar amount that is a multiple of five dollars.
(b)
(2)(i) The borrower may prepay the whole or any part of a loan at any time without penalty.
(ii) If the prepayment amount equals or exceeds the monthly payment amount under the repayment schedule established for the loan, the lender shall apply the prepayment to future installments by advancing the next payment due date, unless the borrower requests otherwise. The lender must either inform the borrower in advance using a prominent statement in the borrower coupon book or billing statement that any additional full payment amounts submitted without instructions to the lender as to their handling will be applied to future scheduled payments with the borrower's next scheduled payment due date advanced consistent with the number of additional payments received, or provide a notification to the borrower after the payments are received informing the borrower that the payments have been so applied and the date of the borrower's next scheduled payment due date. Information related to next scheduled payment due date need not be provided to borrower's making such prepayments while in an in-school, grace, deferment, or forbearance period when payments are not due.
(c)
(ii) If the borrower and the lender agree, the amount paid may be less.
(2) The provisions of paragraphs (c)(1) (i) and (ii) of this section may not result in an extension of the maximum repayment period unless forbearance as described in § 682.211, or deferment described in § 682.210, has been approved.
(d)
(2) The repayment period on the loans included in the combined repayment schedule must be calculated based on the beginning of repayment of the most recent included loan.
(3) The interest rate on the loans included in the new combined repayment schedule must be the weighted average of the rates of all included loans.
(e)
(2) A loan made under paragraph (e)(1) of this section—
(i) Must bear interest at the variable rate described in § 682.202(a)(2)(ii) and (3)(ii) as appropriate; and
(ii) May not extend the repayment period provided for in paragraph (a)(8)(i) of this section.
(3) The lender may not charge an additional insurance premium on the loan, but may charge the borrower an administrative fee pursuant to § 682.202(e).
(f)
(2) A loan made under paragraph (f)(1) of this section—
(i) Must bear interest at the variable interest rate described in § 682.202(a)(2)(ii) and (3)(ii) as appropriate;
(ii) May not operate to extend the repayment period provided for in paragraph (a)(8)(i) of this section; and
(iii) Must be disbursed to the holder of the fixed-rate loan to discharge the borrower's obligation thereon.
(3) Upon receipt of the proceeds of a loan made under paragraph (f)(1) of this section, the holder of the fixed-rate loan shall, within five business days, apply the proceeds to discharge the borrower's obligation on the fixed-rate loan, and provide the refinancing lender with either a copy of the borrower's original promissory note evidencing the fixed-rate loan or the holder's written certification that the borrower's obligation on the fixed-rate loan has been fully discharged.
(4) The refinancing lender may charge the borrower an insurance premium on a loan made under paragraph (f)(1) of this section, but may not charge a fee to cover administrative costs.
(5) For purposes of deferments under § 682.210, the refinancing loan—
(i) Is considered a PLUS loan if any of the included loans is a PLUS loan made to a parent;
(ii) Is considered an SLS loan if the combined loan does not include a PLUS loan made to a parent; or
(iii) Is considered a loan to a “new borrower” as defined in § 682.210(b)(7), if all the loans that were refinanced were made on or after July 1, 1987, for a period of enrollment beginning on or after that date.
(g)
(2)(i) Prior to refinancing a fixed-rate loan under paragraph (f) of this section, the lender shall obtain a written statement from the holder of the loan certifying that—
(A) The holder has refused to refinance the fixed-rate loan under paragraph (e) of this section; and
(B) The fixed-rate loan is eligible for insurance or reinsurance under paragraph (g)(1) of this section.
(ii) The holder of the fixed-rate loan shall, within 10 business days of receiving a lender's written request to provide a certification under paragraph (g)(2)(i) of this section, provide the lender with that certification, or provide the lender and the guarantor on the loan with a written explanation of the reasons for its inability to provide the certification to the requesting lender.
(iii) The refinancing lender may rely in good faith on the certification provided by the holder of the fixed-rate loan under paragraph (g)(2)(ii) of this section.
(h)
(2) If the sum of the amount of the Consolidation loan and the unpaid balance on other student loans to the applicant—
(i) Is less than $7,500, the borrower shall repay the Consolidation loan in not more than 10 years;
(ii) Is equal to or greater than $7,500 but less than $10,000, the borrower shall repay the Consolidation loan in not more than 12 years;
(iii) Is equal to or greater than $10,000 but less than $20,000, the borrower shall repay the Consolidation loan in not more than 15 years;
(iv) Is equal to or greater than $20,000 but less than $40,000, the borrower shall repay the Consolidation loan in not more than 20 years;
(v) Is equal to or greater than $40,000 but less than $60,000, the borrower shall repay the Consolidation loan in not more than 25 years; or
(vi) Is equal to or greater than $60,000, the borrower shall repay the Consolidation loan in not more than 30 years.
(3) For the purpose of paragraph (h)(2) of this section, the unpaid balance on other student loans—
(i) May not exceed the amount of the Consolidation loan; and
(ii) With the exception of the defaulted title IV loans on which the borrower has made satisfactory repayment arrangements with the holder of the loan, does not include the unpaid balance on any defaulted loans.
(4) A repayment schedule for a Consolidation loan—
(i) Must be established by the lender;
(ii) Must require that each payment equal at least the interest that accrues during the interval between scheduled payments.
(5) Upon receipt of the proceeds of a loan made under paragraph (h)(2) of this section, the holder of the underlying loan shall promptly apply the proceeds to discharge fully the borrower's obligation on the underlying loan, and provide the consolidating lender with the holder's written certification that the borrower's obligation on the underlying loan has been fully discharged.
(i)
(2)(i) If a lender receives a refund or a return of title IV, HEA program funds under § 668.22 when a student withdraws from a school on a loan that is no longer held by that lender, or that has been discharged by another lender by refinancing under § 682.209(f) or by a Consolidation loan, the lender must transmit the amount of the payment, within 30 days of its receipt, to the lender to whom it assigned the loan, or to the lender that discharged the prior loan, with an explanation of the source of the payment.
(ii) Upon receipt of a refund or a return of title IV, HEA program funds transmitted under paragraph (i)(2)(i) of this section, the holder of the loan promptly must provide written notice to the borrower that the holder has received the return of title IV, HEA program funds.
(j)
(a)
(ii) With the exception of a deferment authorized under paragraph (o) of this section, a borrower may continue to receive a specific type of deferment that is limited to a maximum period of time only if the total amount of time that the borrower has received the deferment does not exceed the maximum time period allowed for the deferment.
(2)(i) For a loan made before October 1, 1981, the borrower is also entitled to have periodic installments of principal deferred during the six-month period (post-deferment grace period) that begins after the completion of each deferment period or combination of those periods, except as provided in paragraph (a)(2)(ii) of this section.
(ii) Once a borrower receives a post-deferment grace period following an unemployment deferment, as described in paragraph (b)(1)(v) of this section, the borrower does not qualify for additional post-deferment grace periods following subsequent unemployment deferments.
(3) Interest accrues and is paid by the borrower during the deferment period and the post-deferment grace period, if applicable, unless interest accrues and is paid by the Secretary for a Stafford loan and for all or a portion of a qualifying Consolidation loan that meets the requirements under § 682.301.
(4) As a condition for receiving a deferment, except for purposes of paragraphs (c)(1)(ii) and (iii) of this section,
(5) An authorized deferment period begins on the date that the holder determines is the date that the condition entitling the borrower to the deferment first existed, except that an initial unemployment deferment as described in paragraph (h)(2) of this section cannot begin more than 6 months before the date the holder receives a request and documentation required for the deferment.
(6) An authorized deferment period ends on the earlier of—
(i) The date when the condition establishing the borrower's eligibility for the deferment ends;
(ii) Except as provided in paragraph (a)(6)(iv) of this section, the date on which, as certified by an authorized official, the borrower's eligibility for the deferment is expected to end;
(iii) Except as provided in paragraph (a)(6)(iv) of this section, the expiration date of the period covered by any certification required by this section to be obtained for the deferment;
(iv) In the case of an in-school deferment, the student's anticipated graduation date as certified by an authorized official of the school; or
(v) The date when the condition providing the basis for the borrower's eligibility for the deferment has continued to exist for the maximum amount of time allowed for that type of deferment.
(7) A lender may not deny a borrower a deferment to which the borrower is entitled, even though the borrower may be delinquent, but not in default, in making required installment payments. The 270- or 330-day period required to establish default does not run during the deferment and post-deferment grace periods. Unless the lender has granted the borrower forbearance under § 682.211, when the deferment and, if applicable, the post-deferment grace period expire, a borrower resumes any delinquency status that existed when the deferment period began.
(8) A borrower whose loan is in default is not eligible for a deferment on that loan, unless the borrower has made payment arrangements acceptable to the lender prior to the payment of a default claim by a guaranty agency.
(9) The borrower promptly must inform the lender when the condition entitling the borrower to a deferment no longer exists.
(10) Authorized deferments are described in paragraph (b) of this section. Specific requirements for each deferment are set forth in paragraphs (c) through (s) of this section.
(11) If two individuals are jointly liable for repayment of a PLUS loan or a Consolidation loan, the lender shall grant a request for deferment if both individuals simultaneously meet the requirements of this section for receiving the same, or different deferments.
(b)
(i) Except as provided in paragraph (c)(5) of this section, engaged in full-time study at a school, or at a school that is operated by the Federal Government (e.g., the service academies), unless the borrower is not a national of the United States and is pursuing a course of study at a school not located in a State;
(ii) Engaged in a course of study under an eligible graduate fellowship program;
(iii) Engaged in a rehabilitation training program for disabled individuals;
(iv) Temporarily totally disabled, or unable to secure employment because the borrower is caring for a spouse or other dependent who is disabled and requires continuous nursing or similar services for up to three years; or
(v) Conscientiously seeking, but unable to find, full-time employment in the United States, for up to two years.
(2) For a borrower of a Stafford or SLS loan, and for a parent borrower of a PLUS loan made before August 15, 1983, deferment is authorized during any period when the borrower is—
(i) On active duty status in the United States Armed Forces, or an officer in the Commissioned Corps of the United States Public Health Service,
(ii) A full-time volunteer under the Peace Corps Act, for up to three years;
(iii) A full-time volunteer under title I of the Domestic Volunteer Service Act of 1973 (ACTION programs), for up to three years;
(iv) A full-time volunteer for a tax-exempt organization, for up to three years; or
(v) Engaged in an internship of residency program, for up to two years (including any period during which the borrower received a deferment authorized under paragraph (b)(5)(iii) of this section).
(3) For a borrower of a Stafford or SLS loan who has been enrolled on at least a half-time basis at an institution of higher education during the six months preceding the beginning of this deferment, deferment is authorized during a period of up to six months during which the borrower is—
(i) (A) Pregnant;
(B) Caring for his or her newborn child; or
(C) Caring for a child immediately following the placement of the child with the borrower before or immediately following adoption; and
(ii) Not attending a school or gainfully employed.
(4) For a “new borrower,” as defined in paragraph (b)(7) of this section, deferment is authorized during periods when the borrower is engaged in at least half-time study at a school, unless the borrower is not a national of the United States and is pursuing a course of study at a school not located in a State.
(5) For a new borrower, as defined in paragraph (b)(7) of this section, of a Stafford or SLS loan, deferment is authorized during any period when the borrower is—
(i) On active duty status in the National Oceanic and Atmospheric Administration Corps, for up to three years (including any period during which the borrower received a deferment authorized under paragraph (b)(2)(i) of this section);
(ii) Up to three years of service as a full-time teacher in a public or non-profit private elementary or secondary school in a teacher shortage area designated by the Secretary under paragraph (q) of this section.
(iii) Engaged in an internship or residency program, for up to two years (including any period during which the borrower received a deferment authorized under paragraph (b)(2)(v) of this section); or
(iv) A mother who has preschool-age children (i.e., children who have not enrolled in first grade) and who is earning not more than $1 per hour above the Federal minimum wage, for up to 12 months of employment, and who began that full-time employment within one year of entering or re-entering the work force. Full-time employment involves at least 30 hours of work a week and it expected to last at least 3 months.
(6) For a parent borrower of a PLUS loan, deferment is authorized during any period when a student on whose behalf the parent borrower received the loan—
(i) Is not independent as defined in section 480(d) of the Act; and
(ii) Meets the conditions and provides the required documentation, for any of the deferments described in paragraphs (b)(1)(i)-(iii) and (b)(4) of this section.
(7) For purposes of paragraph (b)(5) of this section, a “new borrower” with respect to a loan is a borrower who, on the date he or she signs the promissory note, has no outstanding balance on—
(i) A Stafford, SLS, or PLUS loan made prior to July 1, 1987 for a period of enrollment beginning prior to July 1, 1987; or
(ii) A Consolidation loan that repaid a loan made prior to July 1, 1987 and for a period of enrollment beginning prior to July 1, 1987.
(c)
(i) The borrower submits a request and supporting documentation for a deferment;
(ii) The lender receives information from the borrower's school about the borrower's eligibility in connection with a new loan; or
(iii) The lender receives student status information from the borrower's school, either directly or indirectly, indicating that the borrower's enrollment status supports eligibility for a deferment.
(2) The lender must notify the borrower that a deferment has been granted based on paragraph (c)(1)(ii) or (iii) of this section and that the borrower has the option to pay interest that accrues on an unsubsidized FFEL Program loan or to cancel the deferment and continue paying on the loan. The lender must include in the notice an explanation of the consequences of these options.
(3) The lender must consider a deferment granted on the basis of a certified loan application or other information certified by the school to cover the period lasting until the anticipated graduation date appearing on the application, and as updated by notice or SSCR update to the lender from the school or guaranty agency, unless and until it receives notice that the borrower has ceased the level of study (
(4) In the case of a FFEL borrower, the lender shall treat a certified loan application or other form certified by the school or for multiple holders of a borrower's loans, shared data from the Student Status Confirmation Report, as sufficient documentation for an in-school student deferment for any outstanding FFEL loan previously made to the borrower that is held by the lender.
(5) A borrower serving in a medical internship residency program, except for an internship in dentistry, is prohibited from receiving or continuing a deferment on a Stafford, or a PLUS (unless based on the dependent's status) SLS, or Consolidation loan under paragraph (c) of this section.
(d)
(i) That the borrower holds at least a baccalaureate degree conferred by an institution of higher education;
(ii) That the borrower has been accepted or recommended by an institution of higher education for acceptance on a full-time basis into an eligible graduate fellowship program; and
(iii) The borrower's anticipated completion date in the program.
(2) For purposes of paragraph (d)(1) of this section, an eligible graduate fellowship program is a fellowship program that—
(i) Provides sufficient financial support to graduate fellows to allow for full-time study for at least six months;
(ii) Requires a written statement from each applicant explaining the applicant's objectives before the award of that financial support;
(iii) Requires a graduate fellow to submit periodic reports, projects, or evidence of the fellow's progress; and
(iv) In the case of a course of study at a foreign university, accepts the course of study for completion of the fellowship program.
(e)
(2) For purposes of paragraph (e)(1) of this section, an eligible rehabilitation training program for disabled individuals is a program that—
(i) Is licensed, approved, certified, or otherwise recognized as providing rehabilitation training to disabled individuals by—
(A) A State agency with responsibility for vocational rehabilitation programs;
(B) A State agency with responsibility for drug abuse treatment programs;
(C) A State agency with responsibility for mental health services program;
(D) A State agency with responsibility for alcohol abuse treatment programs; or
(E) The Department of Veterans Affairs; and
(ii) Provides or will provide the borrower with rehabilitation services under a written plan that—
(A) Is individualized to meet the borrower's needs;
(B) Specifies the date on which the services to the borrower are expected to end; and
(C) Is structured in a way that requires a substantial commitment by the borrower to his or her rehabilitation. The Secretary considers a substantial commitment by the borrower to be a commitment of time and effort that normally would prevent an individual from engaging in full-time employment, either because of the number of hours that must be devoted to rehabilitation or because of the nature of the rehabilitation. For the purpose of this paragraph, full-time employment involves at least 30 hours of work per week and is expected to last at least three months.
(f)
(2) A borrower is not considered temporarily totally disabled on the basis of a condition that existed before he or she applied for the loan, unless the condition has substantially deteriorated so as to render the borrower temporarily totally disabled, as substantiated by the statement required under paragraph (f)(1) of this section, after the borrower submitted the loan application.
(3) A lender may not grant a deferment based on a single certification under paragraph (f)(1) of this section beyond the date that is six months after the date of certification.
(g)
(i) From a physician, who is a doctor of medicine or osteopathy and is legally authorized to practice, certifying that the borrower's spouse or dependent requires continuous nursing or similar services for a period of at least 90 days; and
(ii) From the borrower, certifying that the borrower is unable to secure full-time employment because he or she is providing continuous nursing or similar services to the borrower's spouse or other dependent. For the purpose of this paragraph, full-time employment involves at least 30 hours of work per week and is expected to last at least three months.
(2) A lender may not grant a deferment based on a single certification under paragraph (g)(1) of this section beyond the date that is six months after the date of the certification.
(h)
(2) A borrower also qualifies for an unemployment deferment by providing to the lender a written certification, or an equivalent as approved by the Secretary, that—
(i) The borrower has registered with a public or private employment agency, if one is available to the borrower within a 50-mile radius of the borrower's current address; and
(ii) For all requests beyond the initial request, the borrower has made at least six diligent attempts during the preceding 6-month period to secure full-time employment.
(3) For purposes of obtaining an unemployment deferment under paragraph (h)(2) of this section, the following rules apply:
(i) A borrower may qualify for an unemployment deferment whether or not the borrower has been previously employed.
(ii) An unemployment deferment is not justified if the borrower refuses to seek or accept employment in kinds of positions or at salary and responsibility levels for which the borrower feels overqualified by virtue of education or previous experience.
(iii) Full-time employment involves at least 30 hours of work a week and is expected to last at least three months.
(iv) The initial period of unemployment deferment may be granted for a period of unemployment beginning up to 6 months before the date the lender receives the borrower's request, and may be granted for up to 6 months after that date.
(4) A lender may not grant an unemployment deferment beyond the date that is 6 months after the date the borrower provides evidence of the borrower's eligibility for unemployment insurance benefits under paragraph (h)(1) of this section or the date the borrower provides the written certification, or an approved equivalent, under paragraph (h)(2) of this section.
(i)
(i) A written statement from the borrower's commanding or personnel officer certifying—
(A) That the borrower is on active duty in the Armed Forces of the United States;
(B) The date on which the borrower's service began; and
(C) The date on which the borrower's service is expected to end; or
(ii)(A) A copy of the borrower's official military orders; and
(B) A copy of the borrower's military identification.
(2) For the purpose of this section, the Armed Forces means the Army, Navy, Air Force, Marine Corps, and the Coast Guard.
(3) A borrower enlisted in a reserve component of the Armed Forces may qualify for a military deferment only for service on a full-time basis that is expected to last for a period of at least one year in length, as evidenced by official military orders, unless an order for national mobilization of reservists is issued.
(4) A borrower enlisted in the National Guard qualifies for a military deferment only while the borrower is on active duty status as a member of the U.S. Army or Air Force Reserves, and meets the requirements of paragraph (i)(3) of this section.
(j)
(1) That the borrower is engaged in full-time service as an officer in the Commissioned Corps of the USPHS;
(2) The date on which the borrower's service began; and
(3) The date on which the borrower's service is expected to end.
(k)
(i) That the borrower has agreed to serve for a term of at least one year;
(ii) The date on which the borrower's service began; and
(iii) The date on which the borrower's service is expected to end.
(2) The lender must grant a deferment for the borrower's full term of service in the Peace Corps, not to exceed three years.
(l)
(1) That the borrower has agreed to serve for a term of at least one year;
(2) The date on which the borrower's service began; and
(3) The date on which the borrower's service is expected to end.
(m)
(1) That the borrower—
(i) Serves in an organization that has obtained an exemption from taxation under section 501(c)(3) of the Internal Revenue Code of 1986;
(ii) Provides service to low-income persons and their communities to assist them in eliminating poverty and poverty-related human, social, and environmental conditions;
(iii) Does not receive compensation that exceeds the rate prescribed under section 6 of the Fair Labor Standards
(iv) Does not, as part of his or her duties, give religious instruction, conduct worship services, engage in religious proselytizing, or engage in fund-raising to support religious activities; and
(v) Has agreed to serve on a full-time basis for a term of at least one year;
(2) The date on which the borrower's service began; and
(3) The date on which the borrower's service is expected to end.
(n)
(i) That the internship or residency program is a supervised training program that requires the borrower to hold at least a baccalaureate degree prior to acceptance into the program;
(ii) That, except for a borrower that provides the statement from a State official described in paragraph (n)(2) of this section, the internship or residency program leads to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility that offers postgraduate training;
(iii) That the borrower has been accepted into the internship or residency program; and
(iv) The anticipated dates on which the borrower will begin and complete the internship or residency program, or, in the case of a borrower providing the statement described in paragraph (n)(2) of this section, the anticipated date on which the borrower will begin and complete the minimum period of participation in the internship program that the State requires be completed before an individual may be certified for professional practice or service.
(2) For a borrower who does not provide a statement certifying to the matters set forth in paragraph (n)(1)(ii) of this section to qualify for an internship deferment under paragraph (b)(2)(v) of this section, the borrower shall provide the lender with a statement from an official of the appropriate State licensing agency certifying that the internship or residency program, or a portion thereof, is required to be completed before the borrower may be certified for professional practice or service.
(o)
(i) A statement from an authorized official of a participating school certifying that the borrower was enrolled on at least a half-time basis during the six months preceding the beginning of the deferment period;
(ii) A statement from the borrower certifying that the borrower—
(A) Is pregnant, caring for his or her newborn child, or caring for a child immediately following the placement of the child with the borrower in connection with an adoption;
(B) Is not, and will not be, attending school during the deferment period; and
(C) Is not, and will not be, engaged in full-time employment during the deferment period; and
(iii) A physician's statement demonstrating the existence of the pregnancy, a birth certificate, or a statement from the adoption agency official evidencing a pre-adoption placement.
(2) For purposes of paragraph (o)(1)(ii)(C) of this section, full-time employment involves at least 30 hours of work per week and is expected to last at least three months.
(p)
(1) That the borrower is on active duty service in the NOAA corps;
(2) The date on which the borrower's service began; and
(3) The date on which the borrower's service is expected to end.
(q)
(i) A statement by the chief administrative officer of the public or nonprofit private elementary or secondary school in which the borrower is teaching, certifying that the borrower is employed as a full-time teacher; and
(ii) A certification that he or she is teaching in a teacher shortage area designated by the Secretary as provided in paragraphs (q) (5) through (7) of this section, as described in paragraph (q)(2) of this section.
(2) In order to satisfy the requirement for certification that a borrower is teaching in a teacher shortage area designated by the Secretary, a borrower must do one of the following:
(i) If the borrower is teaching in a State in which the Chief State School Officer has complied with paragraph (q)(3) of this section and provides an annual listing of designated teacher shortage areas to the State's chief administrative officers whose schools are affected by the Secretary's designations, the borrower may obtain a certification that he or she is teaching in a teacher shortage area from his or her school's chief administrative officer.
(ii) If a borrower is teaching in a State in which the Chief State School Officer has not complied with paragraph (q)(3) of this section or does not provide an annual listing of designated teacher shortage areas to the State's chief administrative officers whose schools are affected by the Secretary's designations, the borrower must obtain certification that he or she is teaching in a teacher shortage area from the Chief State School Officer for the State in which the borrower is teaching.
(3) In the case of a State in which borrowers wish to obtain certifications as provided for in paragraph (q)(2)(i) of this section, the State's Chief State School Officer must first have notified the Secretary, by means of a one-time written assurance, that he or she provides annually to the State's chief administrative officers whose schools are affected by the Secretary's designations and the guaranty agency for that State, a listing of the teacher shortage areas designated by the Secretary as provided for in paragraphs (q) (5) through (7) of this section.
(4) If a borrower who receives a deferment continues to teach in the same teacher shortage area as that in which he or she was teaching when the deferment was originally granted, the borrower shall, at the borrower's request, continue to receive the deferment for those subsequent years, up to the three-year maximum deferment period, even if his or her position does not continue to be within an area designated by the Secretary as a teacher shortage area in those subsequent years. To continue to receive the deferment in a subsequent year under this paragraph, the borrower shall provide the lender with a statement by the chief administrative officer of the public or nonprofit private elementary or secondary school that employs the borrower, certifying that the borrower continues to be employed as a full-time teacher in the same teacher shortage area for which the deferment was received for the previous year.
(5) For purposes of this section a teacher shortage area is—
(i)(A) A geographic region of the State in which there is a shortage of elementary or secondary school teachers; or
(B) A specific grade level or academic, instructional, subject-matter, or discipline classification in which there is a statewide shortage of elementary or secondary school teachers; and
(ii) Designated by the Secretary under paragraphs (q)(6) or (q)(7) of this section.
(6)(i) In order for the Secretary to designate one or more teacher shortage areas in a State for a school year, the Chief State School Officer shall by January 1 of the calendar year in which the school year begins, and in accordance with objective written standards, propose teacher shortage areas to the Secretary for designation. With respect to private nonprofit schools included in the recommendation, the Chief State School Officer shall consult with appropriate officials of the private nonprofit schools in the State prior to submitting the recommendation.
(ii) In identifying teacher shortage areas to propose for designation under paragraph (q)(6)(i) of this section, the Chief State School Officer shall consider data from the school year in which the recommendation is to be made, unless that data is not yet available, in which case he or she may use data from the immediately preceding school year, with respect to—
(A) Teaching positions that are unfilled;
(B) Teaching positions that are filled by teachers who are certified by irregular, provisional, temporary, or emergency certification; and
(C) Teaching positions that are filled by teachers who are certified, but who are teaching in academic subject areas other than their area of preparation.
(iii) If the total number of unduplicated full-time equivalent (FTE) elementary or secondary teaching positions identified under paragraph (q)(6)(ii) of this section in the shortage areas proposed by the State for designation does not exceed 5 percent of the total number of FTE elementary and secondary teaching positions in the State, the Secretary designates those areas as teacher shortage areas.
(iv) If the total number of unduplicated FTE elementary and secondary teaching positions identified under paragraph (q)(6)(ii) of this section in the shortage areas proposed by the State for designation exceeds 5 percent of the total number of elementary and secondary FTE teaching positions in the State, the Chief State School Officer shall submit, with the list of proposed areas, supporting documentation showing the methods used for identifying shortage areas, and an explanation of the reasons why the Secretary should nevertheless designate all of the proposed areas as teacher shortage areas. The explanation must include a ranking of the proposed shortage areas according to priority, to assist the Secretary in determining which areas should be designated. The Secretary, after considering the explanation, determines which shortage areas to designate as teacher shortage areas.
(7) A Chief State School Officer may submit to the Secretary for approval an alternative written procedure to the one described in paragraph (q)(6) of this section, for the Chief State School Officer to use to select the teacher shortage areas recommended to the Secretary for designation, and for the Secretary to use to choose the areas to be designated. If the Secretary approves the proposed alternative procedure, in writing, that procedure, once approved, may be used instead of the procedure described in paragraph (q)(6) of this section for designation of teacher shortage areas in that State.
(8) For purposes of paragraphs (q)(1) through (7) of this section—
(i) The definition of the term
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(r)
(i) Is the mother of a preschool-age child;
(ii) Entered or reentered the workforce not more than one year before the beginning date of the period for which the deferment is being sought;
(iii) Is currently engaged in full-time employment; and
(iv) Does not receive compensation that exceeds $1 per hour above the rate prescribed under section 6 of the Fair Labor Standards Act of 1938 (the Federal minimum wage).
(2) In addition to the certification required under paragraph (r)(1) of this section, the borrower shall provide to the lender documents demonstrating the age of her child (e.g., a birth certificate) and the rate of her compensation (e.g., a pay stub showing her hourly rate of pay).
(3) For purposes of this paragraph—
(i) A preschool-age child is one who has not yet enrolled in first grade or a higher grade in elementary school; and
(ii) Full-time employment involves at least 30 hours of work a week and is expected to last at least 3 months.
(s)
(2)
(3)
(4)
(5)
(6)
(i) Has been granted an economic hardship deferment under either the Direct Loan or Federal Perkins Loan Programs for the period of time for which the borrower has requested an economic hardship deferment for his or her FFEL loan.
(ii) Is receiving payment under a Federal or State public assistance program, such as Aid to Families with Dependent Children, Supplemental Security Income, Food Stamps, or State general public assistance.
(iii) Is working full-time and has a monthly income that does not exceed the greater of (as calculated on a monthly basis)—
(A) The minimum wage rate described in section 6 of the Fair Labor Standards Act of 1938; or
(B) An amount equal to 100 percent of the poverty line for a family of two, as determined in accordance with section 673(2) of the Community Services Block Grant Act.
(iv) Is working full-time and has a Federal education debt burden that equals or exceeds 20 percent of the borrower's monthly income, and that income, minus the borrower's Federal education debt burden, is less than 220 percent of the amount described in paragraph (s)(6)(iii) of this section.
(v) Is not working full-time and has a monthly income that—
(A) Does not exceed twice the amount described in paragraph (s)(6)(iii) of this section; and
(B) After deducting an amount equal to the borrower's Federal education debt burden, the remaining amount of the borrower's income does not exceed the amount described in paragraph (s)(6)(iii) of this section.
(vi) Is serving as a volunteer in the Peace Corps.
(vii) In determining a borrower's Federal education debt burden for purposes of an economic hardship deferment under paragraphs (s)(6)(iv) and (v) of this section, the lender shall—
(A) If the Federal postsecondary education loan is scheduled to be repaid in 10 years or less, use the actual monthly payment amount (or a proportional share if the payments are due less frequently than monthly);
(B) If the Federal postsecondary education loan is scheduled to be repaid in more than 10 years, use a monthly payment amount (or a proportional share if the payments are due less frequently than monthly) that would have been due on the loan if the loan had been scheduled to be repaid in 10 years; and
(C) Require the borrower to provide evidence that would enable the lender to determine the amount of the monthly payments that would have been owed by the borrower during the deferment period.
(viii) For an initial period of deferment granted under paragraphs (s)(6)(iii) through (v) of this section, the lender must require the borrower to submit evidence showing the amount of the borrower's monthly income.
(ix) To qualify for a subsequent period of deferment that begins less than one year after the end of a period of deferment under paragraphs (s)(6)(iii) through (v) of this section, the lender must require the borrower to submit evidence showing the amount of the borrower's monthly income or a copy of the borrower's most recently filed Federal income tax return.
(x) For purposes of paragraph (s)(6) of this section, a borrower's monthly income is the gross amount of income received by the borrower from employment and from other sources, or one-twelfth of the borrower's adjusted gross income, as recorded on the borrower's most recently filed Federal income tax return.
(xi) For purposes of paragraph (s)(6) of this section, a borrower is considered to be working full-time if the borrower is expected to be employed for at least three consecutive months at 30 hours per week.
(a)(1) The Secretary encourages a lender to grant forbearance for the benefit of a borrower or endorser in order to prevent the borrower or endorser from defaulting on the borrower's or endorser's repayment obligation, or to permit the borrower or endorser to resume honoring that obligation after default.
(2) Subject to paragraph (g) of this section, a lender may grant forbearance of payments of principal and interest under paragraphs (b), (c), and (d) of this section only if—
(i) The lender reasonably believes, and documents in the borrower's file, that the borrower or endorser intends to repay the loan but, due to poor health or other acceptable reasons, is currently unable to make scheduled payments; or
(ii) The borrower's payments of principal are deferred under § 682.210 and the Secretary does not pay interest benefits on behalf of the borrower under § 682.301.
(3) If two individuals are jointly liable for repayment of a PLUS loan or a Consolidation loan, the lender may grant forbearance on repayment of the loan only if the ability of both individuals to make scheduled payments has been impaired based on the same or differing conditions.
(4) Except as provided in paragraph (f)(9) of this section, if payments of interest are forborne, they may be capitalized as provided in § 682.202(b).
(b) A lender may grant forbearance if—
(1) The lender and the borrower or endorser agree to the terms of the forbearance and, unless the agreement was in writing, the lender sends, within 30 days, a notice to the borrower or endorser confirming the terms of the forbearance; or
(2) In the case of forbearance of interest during a period of deferment, if the lender informs the borrower at the time the deferment is granted that interest payments are to be forborne.
(c) A lender may grant forbearance for a period of up to one year at a time if both the borrower or endorser and an authorized official of the lender agree to the terms of the forbearance. If the lender and the borrower or endorser agree to the terms orally, the lender must notify the borrower or endorser of the terms within 30 days of that agreement.
(d) A guaranty agency may authorize a lender to grant forbearance to permit a borrower or endorser to resume honoring the agreement to repay the debt after default but prior to claim payment. The terms of the forbearance agreement in this situation must include a new signed agreement to repay the debt.
(e) Except in the case of forbearance of interest payments during a deferment period, if a forbearance involves the postponement of all payments, the lender must contact the borrower or endorser at least once every six months during the period of forbearance to inform the borrower or endorser of—
(1) The outstanding obligation to repay;
(2) The amount of the unpaid principal balance and any unpaid interest that has accrued on the loan;
(3) The fact that interest will accrue on the loan for the full term of the forbearance; and
(4) The borrower's or endorser's option to discontinue the forbearance at any time.
(f) A lender may grant forbearance, upon notice to the borrower or if applicable, the endorser, with respect to payments of interest and principal that are overdue or would be due—
(1) For a properly granted period of deferment for which the lender learns the borrower did not qualify;
(2) Upon the beginning of an authorized deferment period under § 682.210, or an administrative forbearance period as specified under paragraph (f)(11) or (i)(2) of this section;
(3) For the period beginning when the borrower entered repayment until the first payment due date was established;
(4) For the period prior to the borrower's filing of a bankruptcy petition as provided in § 682.402(f).
(5) For the periods described in § 682.402(c) in regard to the borrower's total and permanent disability;
(6) For a period not to exceed an additional 60 days after the lender has suspended collection activity for the initial 60-day period required pursuant to § 682.211(i)(6) and § 682.402(b)(3), when the lender receives reliable information that the borrower (or student in the case of a PLUS loan) has died;
(7) For periods necessary for the Secretary or guaranty agency to determine the borrower's eligibility for discharge of the loan because of an unpaid refund, attendance at a closed school or false certification of loan eligibility,
(8) For a period of delinquency at the time a loan is sold or transferred, if the borrower or endorser is less than 60 days delinquent on the loan at the time of sale or transfer.
(9) For a period of delinquency that may remain after a borrower ends a period of deferment or mandatory forbearance until the next due date, which can be no later than 45 days after the period ends.
(10) For a period not to exceed 60 days necessary for the lender to collect and process documentation supporting the borrower's request for a deferment, forbearance, change in repayment plan, or consolidation loan. Interest that accrues during this period is not capitalized.
(11) For a period not to exceed 3 months when the lender determines that a borrower's ability to make payments has been adversely affected by a natural disaster, a local or national emergency as declared by the appropriate government agency, or a military mobilization.
(g) In granting a forbearance under this section, except for a forbearance under paragraph (i)(5) of this section, a lender shall grant a temporary cessation of payments, unless the borrower chooses another form of forbearance subject to paragraph (a)(1) of this section.
(h)
(i) For the length of time remaining in the borrower's medical or dental internship or residency that must be successfully completed before the borrower may begin professional practice or service; or
(ii) For the length of time that the borrower is serving in a medical or dental internship or residency program leading to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility that offers postgraduate training.
(2)
(i) In increments up to one year, for periods that collectively do not exceed three years, if—
(A) The borrower or endorser is currently obligated to make payments on Title IV loans; and
(B) The amount of those payments each month (or a proportional share if the payments are due less frequently than monthly) is collectively equal to or greater than 20 percent of the borrower's or endorser's total monthly income;
(ii) In yearly increments (or a lesser period equal to the actual period during which the borrower is eligible) for as long as a borrower—
(A) Is serving in a national service position for which the borrower receives a national service educational award under the National and Community Service Trust Act of 1993;
(B) Is performing the type of service that would qualify the borrower for a partial repayment of his or her loan under the Student Loan Repayment Programs administered by the Department of Defense under 10 U.S.C. 2171; or
(C) Is performing the type of service that would qualify the borrower for loan forgiveness and associated forbearance under the requirements of the teacher loan forgiveness program in § 682.215.
(3)
(i) By the lender and the borrower for a forbearance under paragraphs (h)(1) or (h)(2)(ii)(A) of this section; or
(ii) By the lender and the borrower or endorser for a forbearance under paragraph (h)(2)(i) of this section.
(4)
(A) Evidence showing the amount of the most recent total monthly gross income received by the borrower or endorser from employment and from other sources; and
(B) Evidence showing the amount of the monthly payments owed by the borrower or endorser to other entities for the most recent month for the borrower's or endorser's Title IV loans.
(ii) Before granting a forbearance to a borrower or endorser under paragraph (h)(2)(ii)(B) of this section, the lender shall require the borrower or endorser to submit documentation showing the beginning and ending dates that the Department of Defense considers the borrower to be eligible for a partial repayment of his or her loan under the Student Loan Repayment Programs.
(iii) Before granting a forbearance to a borrower under paragraph (h)(2)(ii)(C) of this section, the lender must require the borrower to—
(A) Submit documentation for the period of the annual forbearance request showing the beginning and anticipated ending dates that the borrower is expected to perform, for that year, the type of service described in § 682.215(c); and
(B) Certify the borrower's intent to satisfy the requirements of § 682.215(c).
(i)
(2) The lender is not required to notify the borrower (or endorser, if applicable) at the time the forbearance is granted, but shall grant a forbearance to a borrower or endorser during a period, and the 30 days following the period, when the lender is notified by the Secretary that—
(i) Exceptional circumstances exist, such as a local or national emergency or military mobilization; or
(ii) The geographical area in which the borrower or endorser resides has been designated a disaster area by the president of the United States or Mexico, the Prime Minister of Canada, or by a Governor of a State.
(3) As soon as feasible, or by the date specified by the Secretary, the lender shall notify the borrower (or endorser, if applicable) that the lender has granted a forbearance and the date that payments should resume. The lender's notification shall state that the borrower or endorser—
(i) May decline the forbearance and continue to be obligated to make scheduled payments; or
(ii) Consents to making payments in accordance with the lender's notification if the forbearance is not declined.
(4) For purposes of paragraph (i)(2)(i) of this section, the term “military mobilization” shall mean a situation in which the Department of Defense orders members of the National Guard or Reserves to active duty under sections 688, 12301(a), 12301(g), 12302, 12304, and 12306 of title 10, United States Code. This term also includes the assignment of other members of the Armed Forces to duty stations at locations other than the locations at which they were normally assigned, only if the military mobilization involved the activation of the National Guard or Reserves.
(5) The lender shall grant a mandatory administrative forbearance to a borrower (or endorser, if applicable) during a period when the borrower (or endorser, if applicable) is making payments for a period of—
(i) Up to 3 years of payments in cases where the effect of a variable interest rate on a standard or graduated repayment schedule would result in a loan
(ii) Up to 5 years of payments in cases where the effect of decreased installment amounts paid under an income-sensitive repayment schedule would result in the loan not being repaid within the maximum repayment term.
(6) The lender shall grant a mandatory administrative forbearance to a borrower for a period not to exceed 60 days after the lender receives reliable information indicating that the borrower (or student in the case of a PLUS loan) has died, until the lender receives documentation of death pursuant to § 682.402(b)(3).
(a) No points, premiums, payments, or additional interest of any kind may be paid or otherwise extended to any eligible lender or other party in order to—
(1) Secure funds for making loans; or
(2) Induce a lender to make loans to either the students or the parents of students of a particular school or particular category of students or their parents.
(b) The following are examples of transactions that, if entered into for the purposes described in paragraph (a) of this section, are prohibited:
(1) Cash payments by or on behalf of a school made to a lender or other party.
(2) The maintaining of a compensating balance by or on behalf of a school with a lender.
(3) Payments by or on behalf of a school to a lender of servicing costs on loans that the school does not own.
(4) Payments by or on behalf of a school to a lender of unreasonably high servicing costs on loans that the school does own.
(5) Purchase by or on behalf of a school of stock of the lender.
(6) Payments ostensibly made for other purposes.
(c) Except when purchased by the Student Loan Marketing Association, an agency of any State functioning as a secondary market or in any other circumstances approved by the Secretary, notes, or any interest in notes, may not be sold or otherwise transferred at discount if the underlying loans were made—
(1) By a school; or
(2) To students or parents of students attending a school by a lender having common ownership with that school.
(d) Except to secure a loan from the Student Loan Marketing Association or an agency of a State functioning as a secondary market or in other circumstances approved by the Secretary, a school or lender (with respect to a loan made to a student, or a parent of a student, attending a school having common ownership with that lender), may not use a loan made under the FFEL programs as collateral for any loan bearing aggregate interest and other charges in excess of the sum of the interest rate applicable to the loan plus the rate of the most recently prescribed special allowance under § 682.302.
(e) The prohibitions described in paragraphs (a), (b), (c), and (d) of this section apply to any school, lender, or other party that would participate in a proscribed transaction.
(f) This section does not preclude a buyer of loans made by a school from obtaining from the loan seller a warranty that—
(1) Covers future reductions by the Secretary or a guaranty agency in computing the amount of loss payable on default claims filed on the loans, if the reductions are attributable to an act, or failure to act, on the part of the seller or previous holder; and
(2) Does not cover matters for which a purchaser is charged with responsibility under this part, such as due diligence in collecting loans.
(g) Section 490(c) of the Act provides that any person who knowingly and willfully makes an unlawful payment
For purposes of the calculations required by this part, a lender may not use the Rule of 78s to calculate the outstanding principle balance of a loan, except for a loan made to a borrower who entered repayment before June 26, 1987 and who was informed in the promissory note that interest on the loan would be calculated using the Rule of 78s. For those loans, the Rule of 78s must be used for the life of the loan.
In making a Stafford loan on which interest benefits are to be paid, a lender shall comply with the equal credit opportunity requirements of Regulation B (12 CFR part 202). With regard to Regulation B, the Secretary considers the Stafford loan program to be a credit-assistance program authorized by Federal law for the benefit of an economically disadvantaged class of persons within the meaning of 12 CFR 202.8(a)(1). Therefore, under 12 CFR 202.8(d), the lender may request a loan applicant to disclose his or her marital status, income from alimony, child support, and separate maintenance income, and spouse's financial resources.
(a)
(b)
(c)
(i) Is in a school district that qualifies for funds under title I of the Elementary and Secondary Education Act of 1965, as amended;
(ii) Has been selected by the Secretary based on a determination that more than 30 percent of the school's total enrollment is made up of children who qualify for services provided under title I; and
(iii) Is listed in the
(2) If the school at which the borrower is employed meets the requirements specified in paragraph (c)(1) of this section for at least one year of the borrower's five consecutive complete academic years of teaching and the school fails to meet those requirements in subsequent years, those subsequent years of teaching qualify for purposes of this section for that borrower.
(3) A borrower who is employed as an elementary school teacher must demonstrate knowledge and teaching skills in reading, writing, mathematics, and other areas of the elementary school curriculum, as certified by the chief administrative officer of the school in which the borrower was employed.
(4) A borrower who is employed as a secondary school teacher must teach in a subject area that is relevant to the borrower's academic major as certified by the chief administrative officer of the school in which the borrower was employed.
(5) The academic year may be counted as one of the borrower's five consecutive complete academic years if the borrower completes at least one-half of the academic year and the borrower's employer considers the borrower to have fulfilled his or her contract requirements for the academic year for the purposes of salary increases, tenure, and retirement if the borrower is unable to complete an academic year due to—
(i) A return to postsecondary education, on at least a half-time basis, that is directly related to the performance of the service described in this section;
(ii) A condition that is covered under the Family and Medical Leave Act of 1993 (FMLA) (19 U.S.C. 2654); or
(iii) A call or order to active duty status for more than 30 days as a member of a reserve component of the Armed Forces named in section 10101 of title 10, United States Code.
(6) A borrower's period of postsecondary education, qualifying FMLA condition, or military active duty as described in paragraph (c)(5) of this section, including the time necessary for the borrower to resume qualifying teaching no later than the beginning of the next regularly scheduled academic year, does not constitute a break in the required five consecutive years of qualifying teaching service.
(7) A borrower who taught in more than one qualifying school during an academic year and demonstrates that the combined teaching was the equivalent of full-time, as supported by the certification of one or more of the chief administrative officers of the schools involved, is considered to have completed one academic year of qualifying teaching.
(8) A borrower is not eligible for teacher loan forgiveness on a defaulted loan unless the borrower has made satisfactory repayment arrangements to re-establish title IV eligibility, as defined in § 682.200.
(9) A borrower may not receive loan forgiveness for qualifying teaching service under this section if the borrower receives a benefit for the same teaching service under subtitle D of title I of the National and Community Service Act of 1990.
(d)
(2) A borrower may not receive more than a total of $5,000 in loan forgiveness for outstanding principal and accrued interest under both this section and under section 34 CFR 685.217.
(3) The holder does not refund payments that were received from or on behalf of a borrower who qualifies for loan forgiveness under this section.
(e)
(i) Under § 682.211(h)(2)(ii)(C) and (h)(3)(iii), in annual increments for each of the years of qualifying teaching service, if the holder believes, at the time of the borrower's annual request, that the expected cancellation amount will satisfy the anticipated remaining outstanding balance on the loan at the time of the expected cancellation;
(ii) For a period not to exceed 60 days while the holder is awaiting a completed teacher loan forgiveness application from the borrower; and
(iii) For the period beginning on the date the holder receives a completed loan forgiveness application to the date the holder receives either a denial of the request or the loan discharge amount from the guaranty agency, in accordance with paragraph (f) of this section.
(2) At the conclusion of a forbearance authorized under paragraph (e)(1) of this section, the holder must resume collection activities and may capitalize any interest accrued and not paid during the forbearance period in accordance with § 682.202(b).
(3) Nothing in paragraph (e) of this section restricts holders from offering other forbearance options to borrowers who do not meet the requirements of paragraph (e)(1)(i) of this section.
(f)
(2)(i) The holder must file a request for payment with the guaranty agency on a teacher forgiveness discharge no later than 60 days after the receipt, from the borrower, of a completed teacher loan forgiveness application.
(ii) When filing a request for payment on a teacher forgiveness discharge, the holder must provide the guaranty agency with the completed loan forgiveness application submitted by the borrower and any required supporting documentation.
(iii) If the holder files a request for payment later than 60 days after the receipt of the completed teacher loan forgiveness application form, interest that accrued on the discharged amount after the expiration of the 60-day filing period is ineligible for reimbursement by the Secretary, and the holder must repay all interest and special allowance received on the discharged amount for periods after the expiration of the 60-day filing period. The holder cannot collect from the borrower any interest that is not paid by the Secretary under this paragraph.
(3)(i) Within 45 days of receiving the holder's request for payment, the guaranty agency must determine if the borrower meets the eligibility requirements for loan forgiveness under this section and must notify the holder of its determination of the borrower's eligibility for loan forgiveness under this section.
(ii) If the guaranty agency approves the discharge, it must, within the same 45-day period, pay the holder the amount of the discharge, up to $5,000, subject to paragraphs (c)(9), (d)(1), (d)(2) and (f)(2)(iii) of this section.
(4) After being notified by the guaranty agency of its determination of the eligibility of the borrower for the discharge, the holder must, within 30 days, inform the borrower of the determination. If the discharge is approved, the holder must also provide the borrower with information regarding any new repayment terms of remaining loan balances.
(5) Unless otherwise instructed by the borrower, the holder must apply the proceeds of the teacher forgiveness
(g)
(a)
(b)
(i) During all periods prior to the beginning of the repayment period, except as provided in paragraphs (b)(2) and (c) of this section.
(ii) During any period when the borrower has an authorized deferment, and, if applicable, a post-deferment grace period; and
(iii) During the repayment period for loans described in paragraph (d)(2) of this section.
(2) The Secretary's obligation to pay interest benefits on an otherwise eligible loan terminates on the earliest of—
(i) The date the borrower's loan is repaid;
(ii) The date the disbursement check is returned uncashed to the lender, or the 120th day after the date of that disbursement, except as provided in paragraph (c)(4) of this section if—
(A) The check for the disbursement has not been cashed on or before that date; or
(B) The proceeds of the disbursement made by electronic funds transfer or master check in accordance with § 682.207(b)(1)(ii) (B) and (C) have not been released from the account maintained by the school on or before that date;
(iii) The date of default by the borrower;
(iv) The date the lender receives payment of a claim for loss on the loan;
(v) The date the borrower's loan is discharged in bankruptcy;
(vi) The date the lender determines that the borrower has died or has become totally and permanently disabled;
(vii) The date the loan ceases to be guaranteed or ceases to be eligible for reinsurance under this part, with respect to that portion of the loan that ceases to be guaranteed or reinsured, regardless of whether the lender has filed a claim for loss on the loan with the guarantor; or
(viii) The date the lender determines that the borrower is eligible for loan discharge under § 682.402(d), (e), or (l).
(3) Section 682.412 sets forth circumstances under which a lender may be required to repay interest benefits received on a loan guaranteed by a guaranty agency.
(c)
(1) Interest for which the borrower is not otherwise liable;
(2) Interest paid on behalf of the borrower by a guaranty agency;
(3) Interest that accrues on the first disbursement of a loan for any period that is earlier than—
(i) In the case of a subsidized Stafford loan disbursed by a check, 10 days prior to the first day of the period of enrollment for which the loan is intended or, if the loan is disbursed after the first day of the period of enrollment, 3 days after the disbursement date on the check; or
(ii) In the case of a loan disbursed by electronic funds transfer or master check, 3 days prior to the first day of the period of enrollment or, if the loan is disbursed after the first day of the period of enrollment, 3 days after disbursement.
(4) In the case of a loan disbursed on or after October 1, 1992, interest on a loan if—
(i) The disbursement check is returned uncashed to the lender or the lender is notified that the disbursement made by electronic funds transfer or master check will not be released from the restricted account maintained by the school; or
(ii) The check for the disbursement has not been negotiated before the 120th day after the date of disbursement or the disbursement made by electronic funds transfer or master check has not been released from the restricted account maintained by the school before that date.
(d)
(2) For a loan disbursed prior to December 15, 1968, or subject to a binding commitment made prior to that date, the Secretary pays an amount during the repayment period equivalent to 3 percent per year of the unpaid principal amount of the loan.
(a)
(2) The Secretary considers a member of a religious order, group, community, society, agency, or other organization who is pursuing a course of study at an institution of higher education to have no financial need if that organization—
(i) Has as its primary objective the promotion of ideals and beliefs regarding a Supreme Being;
(ii) Requires its members to forego monetary or other support substantially beyond the support it provides; and
(iii) (A) Directs the member to pursue the course of study; or
(B) Provides subsistence support to its members.
(3) A Consolidation loan borrower qualifies for interest benefits during authorized periods of deferment on the portion of the loan that does not represent HEAL loans if the loan application was received by the lender—
(i) On or after January 1, 1993 but prior to August 10, 1993;
(ii) On or after August 10, 1993, but prior to November 13, 1997 if the loan consolidates only subsidized Stafford loans; and
(iii) On or after November 13, 1997, for the portion of the loan that repaid subsidized FFEL loans and Direct Subsidized Loans.
(b)
(c)
(a)
(b)
(2) For a loan made under the Federal SLS or Federal PLUS Program on or after July 1, 1987 and prior to July 1, 1994, and for any Federal PLUS loan made on or after July 1, 1998 or under § 682.209(e) or (f), no special allowance is paid for any period for which the interest rate calculated prior to applying the interest rate maximum for that loan does not exceed—
(i) 12 percent in the case of a Federal SLS or PLUS loan made prior to October 1, 1992;
(ii) 11 percent in the case of a Federal SLS loan made on or after October 1, 1992;
(iii) 10 percent in the case of a Federal PLUS loan made on or after October 1, 1992; or
(iv) 9 percent in the case of a Federal PLUS loan made on or after July 1, 1998.
(3) In the case of a subsidized Stafford loan disbursed on or after October 1, 1992, the Secretary does not pay special allowance on a disbursement if—
(i) The disbursement check is returned uncashed to the lender or the lender is notified that the disbursement made by electronic funds transfer or master check will not be released from the restricted account maintained by the school; or
(ii) The check for the disbursement has not been negotiated before the 120th day after the date of disbursement or the disbursement made by electronic funds transfer or master check has not been released from the restricted account maintained by the school before that date.
(c)
(i) Determining the average of the bond equivalent rates of the 91-day Treasury bills auctioned during the 3-month period;
(ii) Subtracting the applicable interest rate for that loan;
(iii) Adding—
(A)(
(
(B) 2.5 percent to the resulting percentage for a Federal Stafford loan for which the first disbursement is made on or after July 1, 1995 for interest that accrues during the borrower's in-school, grace, and authorized period of deferment;
(C) Except as provided in paragraph (c)(1)(iii)(B) of this section, 3.1 percent to the resulting percentage for a Federal Stafford Loan made on or after October 1, 1992 and prior to July 1, 1998, and for any Federal SLS, Federal PLUS, or Federal Consolidation Loan made on or after October 1, 1992;
(D) 3.25 percent to the resulting percentage, for a loan made on or after November 16, 1986, but before October 1, 1992;
(E) 3.25 percent to the resulting percentage, for a loan made on or after October 17, 1986 but before November 16, 1986, for a period of enrollment beginning on or after November 16, 1986;
(F) 3.5 percent to the resulting percentage, for a loan made prior to October 17, 1986, or a loan described in paragraph (c)(2) of this section; or
(G) 3.5 percent to the resulting percentage, for a loan made on or after October 17, 1986 but before November 16, 1986, for a period of enrollment beginning prior to November 16, 1986;
(iv) Rounding the result upward to the nearest one-eighth of 1 percent, for a loan made prior to October 1, 1981; and
(v) Dividing the resulting percentage by 4.
(2) The special allowance rate determined under paragraph (c)(1)(iii)(F) of this section applies to loans made or purchased from funds obtained from the issuance of an obligation of the—
(i) Maine Educational Loan Marketing Corporation to the Student Loan Marketing Association pursuant to an agreement entered into on January 31, 1984; or
(ii) South Carolina Student Loan Corporation to the South Carolina National Bank pursuant to an agreement entered into on July 30, 1986.
(3)(i) Subject to paragraphs (c)(3) (ii) and (iii) of this section, the special allowance rate is one-half of the rate calculated under paragraph (c)(1)(iii)(F) of this section for a loan made or guaranteed on or after October 1, 1980 that was made or purchased with funds obtained by the holder from—
(A) The proceeds of tax-exempt obligations originally issued prior to October 1, 1993, the income from which is exempt from taxation under the Internal Revenue Code of 1986 (26 U.S.C.);
(B) Collections or payments by a guarantor on a loan that was made or purchased with funds obtained by the holder from obligations described in paragraph (c)(3)(i)(A) of this section;
(C) Interest benefits or special allowance payments on a loan that was made or purchased with funds obtained by the holder from obligations described in paragraph (c)(3)(i)(A) of this section;
(D) The sale of a loan that was made or purchased with funds obtained by the holders from obligations described in paragraph (c)(3)(i)(A) of this section; or
(E) The investment of the proceeds of obligations described in paragraph (c)(3)(i)(A) of this section.
(ii) The special allowance rate applicable to loans described in paragraph (c)(3)(i) of this section that are made prior to October 1, 1992, may not be less than—
(A) 2.5 percent per year on eligible loans for which the applicable interest rate is 7 percent;
(B) 1.5 percent per year on eligible loans for which the applicable interest rate is 8 percent; or
(C) One-half of 1 percent per year on eligible loans for which the applicable rate is 9 percent.
(iii) The special allowance rate applicable to loans described in paragraph (c)(3)(i) of this section that are made on or after October 1, 1992, may not be less than 9
(4) Loans made or purchased with funds obtained by the holder from the issuance of tax-exempt obligations originally issued on or after October 1, 1993, and loans made with funds derived from default reimbursement collections, interest, or other income related to eligible loans made or purchased with those tax-exempt funds, do not qualify for the minimum special allowance rate specified in paragraph (c)(3)(iii) of this section, and are not subject to the 50 percent limitation on the maximum rate otherwise applicable to loans made with tax-exempt funds.
(d)
(i) The date a borrower's loan is repaid;
(ii) The date a borrower's loan check is returned uncashed to the lender;
(iii) The date a lender receives payment on a claim for loss on the loan;
(iv) The date a loan ceases to be guaranteed or ceases to be eligible for reinsurance under this part, with respect to that portion of the loan that ceases to be guaranteed or reinsured, regardless of whether the lender has filed a claim for loss on the loan with the guarantor;
(v) The 60th day after the borrower's default on the loan, unless the lender
(vi) The 120th day after the date of disbursement, if—
(A) The loan check has not been cashed on or before that date; or
(B) the loan proceeds disbursed by electronic funds transfer or master check in accordance with § 682.207(b)(1)(ii) (B) and (C) have not been released from the restricted account maintained by the school on or before that date; or
(vii) The 30th day after the date the lender received a returned claim from the guaranty agency on a loan submitted by the deadline specified in (d)(1)(v) of this section for loss on the loan to the lender due solely to inadequate documentation unless the lender files a claim for loss on the loan with the guarantor, together with all required documentation, prior to the 30th day.
(2) In the case of a loan disbursed on or after October 1, 1992, the Secretary does not pay special allowance on a loan if—
(i) The disbursement check is returned uncashed to the lender or the lender is notified that the disbursement made by electronic funds transfer or master check will not be released from the account maintained by the school; or
(ii) The check for the disbursement has not been negotiated before the 120th day after the date of disbursement or the disbursement made by electronic funds transfer or master check has not been released from the account maintained by the school before that date.
(3) Section 682.413 sets forth the circumstances under which a lender may be required to repay the special allowance received on a loan guaranteed by a guaranty agency.
(e)
(2) The Secretary pays a special allowance to an Authority at the rate prescribed in paragraph (c)(1) of this section on a loan described in paragraph (c)(3)(i) of this section—
(i) After the loan is pledged or otherwise transferred in consideration of funds derived from sources other than those described in paragraph (c)(3)(i) of this section; and
(ii) If the authority retains a legal or equitable interest in the loan—
(A) The prior tax-exempt obligation is retired; or
(B) The prior tax-exempt obligation is defeased by means of obligations that the Authority certifies in writing to the Secretary bear a yield that does not exceed the yield permitted under Internal Revenue Service regulations, 26 CFR 1.103-14, with regard to investments of proceeds of a tax-exempt refunding obligation.
(a)
(b)
(2) The Secretary computes the interest benefits due on all qualified loans at each actual interest rate by multiplying the average daily balance thereof by the actual interest rate, multiplying this result by the number of days in the quarter, and then dividing this result by the actual number of days in the year.
(c)
(2) The interest benefits due for a quarter equal the sum of the daily interest benefits due, computed under paragraph (c)(1) of this section, for each day of the quarter.
(d)
(2) The Secretary computes the special allowance payable to a lender based upon the average daily balance computed by the lender under paragraph (d)(1) of this section.
(a)
(2) The lender shall report, on the quarterly report required by paragraph (a)(1) of this section, the amount of origination fees it was authorized to collect and the amount of those fees refunded to borrowers during the quarter covered by the report.
(3)(i)(A) The Secretary reduces the amount of interest benefits and special allowance payable to the lender by—
(
(
(B) The Secretary increases the amount of interest benefits and special allowance payable to the lender by the amount of origination fees refunded to borrowers during the quarter under § 682.202(c).
(ii) For any FFEL loan made on or after October 1, 1993, a lender shall pay the Secretary a loan fee equal to 0.50% of the principal amount of the loan.
(iii) The Secretary collects from an originating lender the amount of origination fees the originating lender was authorized to collect from borrowers during the quarter whether or not the originating lender actually collected those fees. The Secretary also collects the fees the originating lender is required to pay under paragraph (a)(3)(ii) of this section. Generally, the Secretary collects the fees from the originating lender by offsetting the amount of interest benefits and special allowance payable to the originating lender in a quarter, and, if necessary, the amount of interest benefits and special allowance payable in subsequent quarters may be offset until the total amount of fees has been recovered.
(iv) If the full amount of the fees cannot be collected within two quarters by reducing interest and special allowance payable to the originating lender, the Secretary may collect the unpaid amount directly from the originating lender.
(v) If the full amount of the fees cannot be collected within two quarters from the originating lender in accordance with paragraphs (a)(3)(iii) and (iv) of this section and if the originating lender has transferred the loan to a subsequent holder, the Secretary may, following written notice, collect the unpaid amount from the holder by using the same steps described in paragraphs (a)(3)(iii) and (iv) of this section, with the term “holder” substituting for the term “originating lender”.
(4) If an originating lender sells or otherwise transfers a loan to a new holder, the originating lender remains liable to the Secretary for payment of the origination fees. The Secretary will not pay interest benefits or special allowance to the new holder or pay reinsurance to the guaranty agency until the origination fees are paid to the Secretary.
(b)
(ii) The payment of interest benefits or special allowance is deemed to occur, for purposes of this paragraph, when the Secretary—
(A) Authorizes the Treasury Department to pay the lender;
(B) Credits the payment due the lender against a debt that the Secretary determines is owed the Secretary by the lender; or
(C) Authorizes the Treasury Department to pay the amount due by the lender to another Federal agency for credit against a debt that the Federal agency has determined the lender owes.
(2) Penalty interest is an amount that accrues daily on interest benefits and special allowance due to the lender. The penalty interest is computed by—
(i) Multiplying the daily interest rate applicable to loans on which payment for interest benefits was requested, by the amount of interest benefits due on those loans for each interest rate;
(ii) Multiplying the daily special allowance rate applicable to loans on which special allowance was requested by the amount of special allowance due on those loans for each interest rate and special allowance category;
(iii) Adding the results of paragraphs (b)(2)(i) and (ii) of this section to determine the gross penalty interest to be paid for each day that penalty interest is due;
(iv) Dividing the results of paragraph (b)(2)(iii) of this section by the gross amount of interest benefits and special allowance due to obtain the average penalty interest rate;
(v) Multiplying the rate obtained in paragraph (b)(2)(iv) of this section by the total amount of reduction to gross interest benefits and special allowance due (e.g., origination fees or other debts owed to the Federal Government);
(vi) Subtracting the amount calculated in paragraph (b)(2)(v) of this section from the amount calculated under paragraph (b)(2)(iii) of this section to obtain the net amount of penalty interest due per day; and
(vii) Multiplying the amount calculated in paragraph (b)(2)(vi) of this section by the number of days calculated under paragraph (b)(3) of this section.
(3) The Secretary pays penalty interest for the period—
(i) Beginning on the later of—
(A) The 31st day after the final day of the quarter covered by the request for payment; or
(B) The 31st day after the Secretary's receipt of an accurate, timely, and complete request for payment from the lender; and
(ii) Ending on the day the Secretary pays the interest benefits and the special allowance at issue, in accordance with paragraph (b)(1)(ii) of this section.
(4) A request for interest benefits and special allowance is considered timely only if it is received by the Secretary within 90 days following the end of the quarter to which the request pertains.
(5) A request for interest benefits and special allowance is not considered accurate and complete if it—
(i) Requests payments to which the lender is not entitled under §§ 682.300 through 682.302;
(ii) Includes loans that the Secretary, in writing, has directed that the lender exclude from the request;
(iii) Does not contain all information required by the Secretary or contains conflicting information; or
(iv) Is not provided and certified on the form and in the manner prescribed by the Secretary.
(c)
(2) The audit required under paragraph (c)(1) of this section must—
(i) Examine the lender's compliance with the Act and applicable regulations;
(ii) Examine the lender's financial management of its FFEL program activities;
(iii) Be conducted in accordance with the standards for audits issued by the United States General Accounting Office's (GAO's)
(iv) Be conducted at least annually and be submitted to the Secretary within six months of the end of the audit period. The initial audit must be of the lender's first fiscal year that begins after July 23, 1992, and must be submitted within six months of the end of the audit period. Each subsequent audit must cover the lender's activities for the period beginning no later than the end of the period covered by the preceding audit;
(v) With regard to a lender that is a governmental entity, the audit required by this paragraph must be conducted in accordance with 31 U.S.C. 7502 and 34 CFR part 80, appendix G; and
(vi) With regard to a lender that is a nonprofit organization, the audit required by this paragraph must be conducted in accordance with OMB Circular A-133, Audit of Institutions of Higher Education and Other Nonprofit Institutions, as incorporated in 34 CFR 74.61(h)(3). If a nonprofit lender meets the criteria in Circular A-133 for choosing the option for a program-specific audit, and so chooses, the program-specific audit must meet the requirements in paragraphs (c)(1) through (c)(2)(iv) of this section.
(vii) The Secretary may determine that a lender has met the requirements of paragraph (c) of this section if the lender has been audited in accordance with 31 U.S.C. 7502 for other purposes, the lender submits the results of the audit to the Office of Inspector General, and the Secretary determines that the audit meets the requirements of this paragraph.
(a) The Secretary enters into agreements with a guaranty agency whose loan guarantee program meets the requirements of this subpart. The agreements enable the guaranty agency to participate in the FFEL programs and to receive the various payments and benefits related to that participation.
(b) There are four agreements:
(1)
(i) Borrowers whose Stafford and Consolidation loans that consolidate only subsidized Stafford loans are guaranteed by the agency may qualify for interest benefits that are paid to the lender on the borrower's behalf; and
(ii) Lenders under the guaranty agency program may receive special allowance payments from the Secretary and have death, disability, bankruptcy,
(2)
(3)
(4)
(c) The Secretary's execution of an agreement does not indicate acceptance of any current or past standards or procedures used by the agency.
(d) All of the agreements are subject to subsequent changes in the Act, in other applicable Federal statutes, and in regulations that apply to the FFEL programs.
(a)
(b)
(1)
(2)
(ii) A guaranty agency may make the loan amounts authorized under paragraph (b)(2)(i) of this section applicable for either—
(A) A period of not less than that attributable to the academic year;
(B) A period attributable to the academic year in which the student earns the amount of credit in the student's program of study required by the student's school as the amount necessary for the student to advance in academic standing as normally measured on an academic year basis (for example, from freshman to sophomore or, in the case of schools using clock hours, completion of at least 900 clock hours; or
(C) A period that does not exceed 12 months.
(iii) The amount of a loan guaranteed may not exceed the amount set forth in § 682.204(k).
(3)
(ii) Loans must be available to or on behalf of any student for at least six academic years of study.
(4)
(i) For purposes of this section, the determination of reasonable and affordable must—
(A) Include consideration of the borrower's and spouse's disposable income and necessary expenses including, but not limited to, housing, utilities, food, medical costs, dependent care costs, work-related expenses and other Title IV repayment;
(B) Not be a required minimum payment amount, e.g. $50, if the agency determines that a smaller amount is reasonable and affordable based on the borrower's total financial circumstances. The agency must include documentation in the borrower's file of the basis for the determination, if the monthly reasonable and affordable payment established under this section is less than $50.00 or the monthly accrued interest on the loan, whichever is greater.
(C) Be based on the documentation provided by the borrower or other sources including, but not limited to—
(
(
(
(ii) A borrower may request that the monthly payment amount be adjusted due to a change in the borrower's total financial circumstances upon providing the documentation specified in paragraph (b)(4)(i)(C) of this section.
(iii) A guaranty agency must provide the borrower with a written statement of the reasonable and affordable payment amount required for the reinstatement of the borrower's eligibility for Title IV student assistance, and provide the borrower with an opportunity to object to those terms.
(iv) A guaranty agency must provide the borrower with written information regarding the possibility of loan rehabilitation if the borrower makes six additional reasonable and affordable monthly payments after making payments to regain eligibility for Title IV assistance and the consequences of loan rehabilitation.
(v) A guaranty agency must inform the borrower that he or she may only obtain reinstatement of borrower eligibility under thissection once.
(5)
(ii) The borrower must give the lender, as part of the promissory note or application process for a PLUS loan—
(A) A statement, as described in 34 CFR part 668, that the loan will be used for the cost of the student's attendance;
(B) A statement from the student authorizing the school to release information relevant to the student's eligibility to have a parent borrow on the student's behalf (e.g., the student's enrollment status, financial assistance, and employment records); and
(C) Information from the school providing the maximum amount that may be borrowed on behalf of the student.
(iii) The borrower shall give the lender, as part of the application process for a Consolidation loan—
(A) Information demonstrating that the borrower is eligible for the loan under § 682.201(c); and
(B) A statement that the borrower does not currently have another application for a Consolidation loan pending.
(iv) The borrower shall promptly notify—
(A) The current holder or the guaranty agency of any change of name, address, student status to less than half-time, employer, or employer's address; and
(B) The school of any change in local address during enrollment.
(6)
(A) The school's eligibility is limited, suspended, or terminated by the Secretary under 34 CFR part 668 or by the guaranty agency under standards and procedures that are substantially the same as those in 34 CFR part 668;
(B) The Secretary upholds the limitation, suspension, or termination of a school by a guaranty agency and extends that sanction to all guaranty agency programs under section 432(h)(3) of the Act or § 682.713;
(C) The school is ineligible under section 435(a)(2) of the Act;
(D) There is a State constitutional prohibition affecting the school's eligibility;
(E) The school's programs consist of study solely by correspondence;
(F) The agency determines, subject to the agreement of the Secretary, that the school does not satisfy the standards of administrative capability and financial responsibility as defined in 34 CFR part 668;
(G) The school fails to make timely refunds to students as required in § 682.607(c);
(H) The school has not satisfied, within 30 days of issuance, a final judgment obtained by a student seeking a refund;
(I) The school or an owner, director, or officer of the school is found guilty or liable in any criminal, civil, or administrative proceeding regarding the obtaining, maintenance, or disbursement of State or Federal student grant, loan, or work assistance funds; or
(J) The school or an owner, director, or officer of the school has unpaid financial liabilities involving the improper acquisition, expenditure, or refund of State or Federal student financial assistance funds.
(ii)
(A) The standards of financial responsibility defined in 34 CFR 668.5; or
(B) The standards of administrative capability defined in 34 CFR 668.16.
(iii)
(iv)
(7)
(A) The lender's eligibility has been limited, suspended, or terminated by the Secretary under subpart G of this part or by the agency under standards and procedures that are substantially the same as those in subpart G of this part; or
(B) The lender is disqualified by the Secretary under sections 432(h)(1), 432(h)(2), 435(d)(3), or 435(d)(5) of the Act or § 682.712; or
(C) There is a State constitutional prohibition affecting the lender's eligibility.
(ii) The agency may not guarantee a loan made by a school lender that is not located in the geographical area that the agency serves.
(iii) The guaranty agency may refuse to guarantee loans made by a school on behalf of students not attending that school.
(iv) The guaranty agency may, in determining whether to enter into a guarantee agreement with a lender, consider whether the lender has had prior experience in a similar Federal, State, or private nonprofit student loan program and the amount and percentage of loans that are currently delinquent or in default under that program.
(8)
(9)
(10)
(ii) The guaranty agency may use the proceeds of this charge only to guarantee loans and to cover costs incurred by the guaranty agency in the administration of its loan guarantee program.
(iii) The lender may deduct the amount of the premium from the borrower's loan proceeds. For a loan disbursed in more than one installment, the insurance premium must be deducted proportionately from each disbursement of the loan proceeds.
(iv) The amount of the insurance premium may not exceed—
(A) For a loan disbursed on or before June 30, 1994, 3 percent of the principal balance of the loan; or
(B) For a loan disbursed on or after July 1, 1994, 1 percent of the principal balance of the loan.
(v) The guaranty agency shall refund to the lender any insurance premium received for a loan under the circumstances specified in § 682.401(b)(10)(vi) (A) and (B).
(vi) The lender shall refund to the borrower by a credit against the borrower's loan balance the insurance premium paid by the borrower on a loan under the following circumstances:
(A) The premium attributable to each disbursement of a loan must be refunded if the loan check is returned uncashed to the lender.
(B) The premium or an appropriate prorated amount of the premium must be refunded by application to the borrower's loan balance if—
(
(
(
(
(
(
(11)
(12)
(13)
(14)
(i) 100 percent of the unpaid principal balance of each loan guaranteed for loans disbursed before October 1, 1993; and
(ii) Not more than 98 percent of the unpaid principal balance of each loan guaranteed for loans first disbursed on or after October 1, 1993.
(15)
(16)
(17)
(A) An eligible lender;
(B) A guaranty agency, in the case of a borrower's default, death, total and permanent disability, or filing of a bankruptcy petition, or for other circumstances approved by the Secretary, such as a loan made for attendance at a school that closed or a false certification claim;
(C) An educational institution, whether or not it is an eligible lender, in connection with the institution's repayment to the agency or to the Secretary of a guarantee or a reinsurance claim payment made on a loan that was ineligible for the payment;
(D) A Federal or State agency or an organization or corporation acting on behalf of such an agency and acting as a conservator, liquidator, or receiver of an eligible lender; or
(E) The Secretary.
(ii) For the purpose of this paragraph, “assigned” means any kind of transfer of an interest in the loan, including a pledge of such an interest as security.
(iii) The guaranty agency must allow a loan to be assigned under paragraph (b)(17)(i) of this section, following the first disbursement of the loan if the assignment does not result in a change in the identity of the party to whom payments must be made.
(18)
(19)
(A) Ensuring that all lenders in its program meet the definition of “eligible lender” in section 435(d) of the Act and have a written lender agreement with the agency;
(B) School and lender participation in its program;
(C) Limitation, suspension, termination of school and lender participation;
(D) Emergency action against a participating school or lender;
(E) The exercise of due diligence by lenders in making, servicing, and collecting loans; and
(F) The timely filing by lenders of default, death, disability, bankruptcy, closed school, false certification, and ineligible loan claims.
(ii) The guaranty agency shall ensure that its program and all participants in its program at all times meet the requirements of subparts B, C, D, and F of this part.
(20)
(i) The beginning of the borrower's grace period; or
(ii) The beginning or resumption of the borrower's immediate obligation to make scheduled payments.
(21)
(22)
(23)
(A) The name and social security number of the student; and
(B) The annual loan amount and the cumulative amount borrowed by the student in loans under the Stafford and SLS programs guaranteed by the responding agency.
(ii) The reasonable costs incurred by an agency in fulfilling a request for information made under paragraph (b)(23)(i) of this section must be paid by the guaranty agency making the request.
(24)
(25)
(i) Notice of assignment;
(ii) The identity of the assignee;
(iii) The name and address of the party by which contact may be made with the holder concerning repayment of the loan; and
(iv) The telephone number of the assignee or, if the assignee uses a lender servicer, another appropriate number for borrower inquiries.
(26)
(27)
(ii) When returning the proceeds from the consolidation of a defaulted loan to the Secretary, a guaranty agency may only retain the amount added to the borrower's balance pursuant to paragraph (b)(27)(i) of this section.
(28)
(c)
(2) The lender-of-last-resort must make subsidized Federal Stafford loans and unsubsidized Federal Stafford loans to any eligible student who—
(i) Qualifies for interest benefits pursuant to § 682.301;
(ii) Qualifies for a combined loan amount of at least $200; and
(iii) Has been otherwise unable to obtain loans from another eligible lender for the same period of enrollment.
(3) The lender-of-last resort may make unsubsidized Federal Stafford and Federal PLUS loans to borrowers who have been otherwise unable to obtain those loans from another eligible lender.
(4) The guaranty agency must develop policies and operating procedures for its lender-of-last-resort program that provide for the accessibility of lender-of-last-resort loans. These policies and procedures must be submitted to the Secretary for approval as required under paragraph (d)(2) of this section. The policies and procedures for the agency's lender-of-last-resort program must ensure that—
(i) The guaranty agency will serve eligible students attending any eligible school;
(ii) The program establishes operating hours and methods of application designed to facilitate application by students; and
(iii) Information about the availability of loans under the program is made available to schools in the State;
(iv) Appropriate steps are taken to ensure that borrowers receiving loans under the program are appropriately counseled on their loan obligation;
(v) The guaranty agency will respond to a student within 60 days after the student submits an original complete application; and
(vi) Borrowers are not required to obtain more than two objections from eligible lenders prior to requesting assistance under the lender-of-last-resort program.
(5)(i) Upon request of the guaranty agency, the Secretary may advance Federal funds to the agency, on terms and conditions agreed to by the Secretary and the agency, to ensure the availability of loan capital for subsidized and unsubsidized Federal Stafford and Federal PLUS loans to borrowers who are otherwise unable to obtain those loans if the Secretary determines that—
(A) Eligible borrowers in a State who qualify for subsidized Federal Stafford loans are seeking and are unable to obtain subsidized Federal Stafford loans;
(B) The guaranty agency designated for that State has the capability for providing lender-of-last-resort loans in a timely manner, either directly or indirectly using a third party, in accordance with the guaranty agency's obligations under the Act, but cannot do so without advances provided by the Secretary; and
(C) It would be cost-effective to advance Federal funds to the agency.
(ii) If the Secretary determines that the designated guaranty agency does not have the capability to provide lender-of-last-resort loans, in accordance with paragraph (c)(5)(i) of this section, the Secretary may provide Federal
(d)
(2) The guaranty agency shall promptly submit to the Secretary its regulations, statements of procedures and standards, agreements, and other materials that substantially affect the operation of the agency's program, and any proposed changes to those materials. Except as provided in paragraph (d)(1) of this section, the agency may use these materials unless and until the Secretary disapproves them.
(3) The guaranty agency must use common application forms, promissory notes, Master Promissory Notes (MPN), and other common forms approved by the Secretary.
(4)(i) The Secretary authorizes the use of the multi-year feature of the MPN—
(A) For students and parents for attendance at four-year or graduate/professional schools; and
(B) For students and parents for attendance at other institutions meeting criteria or otherwise designated at the sole discretion of the Secretary.
(ii) The Secretary may prohibit use of the multi-year feature of the MPN at specific schools described under paragraph (4)(i) of this section under circumstances including, but not limited to, the school being subject to an emergency action or a limitation, suspension, or termination action, or not meeting other performance criteria determined by the Secretary.
(iii) A student or parent borrower who is borrowing funds for attendance at a school for which the multi-year feature of the MPN has not been authorized must complete a new promissory note for each academic year.
(iv) Each loan made under an MPN is enforceable in accordance with the terms of the MPN and is eligible for claim payment based on a true and exact copy of such MPN.
(v) A lender's ability to make additional loans under an MPN will automatically expire upon the earliest of—
(A) The date the lender receives written notification from the borrower requesting that the MPN no longer be used as the basis for additional loans;
(B) Twelve months after the date the borrower signed the MPN if no disbursements are issued by the lender under that MPN; or
(C) Ten years from the date the borrower signed the MPN or the date the lender receives the MPN. However, if a portion of a loan is made on or before 10 years from the signature date, remaining disbursements of that loan may be made.
(vi) The lender and school must develop and document a confirmation process in accordance with guidelines established by the Secretary for loans made under the multi-year feature of the MPN.
(5) The guaranty agency must develop and implement appropriate procedures that provide for the granting of a student deferment as specified in § 682.210(a)(6)(iv) and (c)(3) and require their lenders to use these procedures.
(6) The guaranty agency shall ensure that all program materials meet the requirements of Federal and State law, including, but not limited to, the Act and the regulations in this part and part 668.
(e)
(1) Offer directly or indirectly any premium, payment, or other inducement to an employee or student of a school, or an entity or individual affiliated with a school, to secure applicants for FFEL loans, except that a guaranty agency is not prohibited from providing assistance to schools comparable to the kinds of assistance provided by the Secretary to schools under, or in furtherance of, the Federal Direct Loan Program;
(2)(i) Offer, directly or indirectly, any premium, incentive payment, or other inducement to any lender, or any person acting as an agent, employee, or independent contractor of any lender or other guaranty agency to administer or market FFEL loans, other than unsubsidized Stafford loans or subsidized Stafford loans made under a
(A) Compensating lenders or their representatives for the purpose of securing loan applications for guarantee;
(B) Performing functions normally performed by lenders without appropriate compensation;
(C) Providing equipment or supplies to lenders at below market cost or rental; or
(D) Offering to pay a lender, that does not hold loans guaranteed by the agency, a fee for each application forwarded for the agency's guarantee.
(ii) For the purposes of this section, the terms “premium”, “inducement”, and “incentive” do not include services directly related to the enhancement of the administration of the FFEL Program the guaranty agency generally provides to lenders that participate in its program. However, the terms “premium”, “inducement”, and “incentive” do apply to other activities specifically intended to secure a lender's participation in the agency's program.
(3) Mail or otherwise distribute unsolicited loan applications to students enrolled in a secondary school or a postsecondary institution, or to parents of those students, unless the potential borrower has previously received loans insured by the guaranty agency;
(4) Conduct fraudulent or misleading advertising concerning loan availability.
(a)
(2) If a Consolidation loan was obtained jointly by a married couple, the amount of the Consolidation loan that is discharged if one of the borrowers dies or becomes totally and permanently disabled is equal to the portion of the outstanding balance of the Consolidation loan, as of the date the borrower died or became totally and permanently disabled, attributable to any of that borrower's loans that would have been eligible for discharge.
(3) If a PLUS loan was obtained by two parents as co-makers, and only one of the borrowers dies, becomes totally and permanently disabled, has collection of his or her loan obligation stayed by a bankruptcy filing, or has that obligation discharged in bankruptcy, the other borrower remains obligated to repay the loan unless that borrower would qualify for discharge of the loan under these regulations.
(4) Except for a borrower's loan obligation discharged by the Secretary under the false certification discharge provision of paragraphs (e)(1)(ii) of this section, a loan qualifies for payment under this section and as provided in paragraph (h)(1)(iv) of this section, only to the extent that the loan is legally enforceable under applicable law by the holder of the loan.
(5) For purposes of this section—
(i) The legal enforceability of a loan is conclusively determined on the basis of a ruling by a court or administrative tribunal of competent jurisdiction with respect to that loan, or a ruling with respect to another loan in a judgment that collaterally estops the holder from contesting the enforceability of the loan;
(ii) A loan is conclusively determined to be legally unenforceable to the extent that the guarantor determines, pursuant to an objection presented in a
(iii) If an objection has been raised by the borrower or another party about the legal enforceability of the loan and no determination has been made under paragraph (a)(5) (i) or (ii) of this section, the Secretary may authorize the payment of a claim under this section under conditions the Secretary considers appropriate. If the Secretary determines in that or any other case that a claim was paid under this section with respect to a loan that was not a legally enforceable obligation of the borrower, the recipient of that payment must refund that amount of the payment to the Secretary.
(b)
(2) A discharge of a loan based on the death of the borrower (or student in the case of a PLUS loan) must be based on an original or certified copy of the death certificate. Under exceptional circumstances and on a case-by-case basis, the chief executive officer of the guaranty agency may approve a discharge based upon other reliable documentation supporting the discharge request.
(3) After receiving reliable information indicating that the borrower (or student) has died, the lender must suspend any collection activity against the borrower and any endorser for up to 60 days and promptly request the documentation described in paragraph (b)(2) of this section. If additional time is required to obtain the documentation, the period of suspension of collection activity may be extended up to an additional 60 days. If the lender is not able to obtain an original or certified copy of the death certificate or other documentation acceptable to the guaranty agency, under the provisions of paragraph (b)(2) of this section, during the period of suspension, the lender must resume collection activity from the point that it had been discontinued. The lender is deemed to have exercised forbearance as to repayment of the loan during the period when collection activity was suspended.
(4) Once the lender has determined under paragraph (b)(2) of this section that the borrower (or student) has died, the lender may not attempt to collect on the loan from the borrower's estate or from any endorser.
(5) The lender shall return to the sender any payments received from the estate or paid on behalf of the borrower after the date of the borrower's (or student's) death.
(6) In the case of a Federal Consolidation Loan that includes a Federal PLUS or Direct PLUS loan borrowed for a dependent who has died, the obligation of the borrower or any endorser to make any further payments on the portion of the outstanding balance of the Consolidation Loan attributable to the Federal PLUS or Direct PLUS loan is discharged as of the date of the dependent's death.
(c)
(ii) A borrower satisfies the criteria for a discharge of a loan based on a total and permanent disability if, during and at the end of the three-year period described in paragraph (c)(1)(i) of this section—
(A) The borrower's annual earnings from employment do not exceed 100 percent of the poverty line for a family
(B) The borrower does not receive a new loan under the Perkins, FFEL, or Direct Loan programs, except for a FFEL or Direct Consolidation loan that does not include any loans that are in a conditional discharge status.
(iii) Except as provided in paragraph (c)(1)(iv)(A) of this section, a borrower is not considered totally and permanently disabled based on a condition that existed at the time the loan was made unless the borrower's condition substantially deteriorated.
(iv)(A) For a Consolidation Loan, a borrower is considered totally and permanently disabled if he or she would be considered totally and permanently disabled under paragraphs (c)(1) (i) through (iii) of this section for all of the loans that were included in the Consolidation Loan if those loans had not been consolidated.
(B) For the purposes of discharging a loan under paragraph (c)(1)(iv)(A) of this section, provisions in paragraphs (c)(1) (i) through (iii) of this section apply to each loan included in the Consolidation Loan, even if the loan is not a FFEL Program loan.
(C) If requested, a borrower seeking to discharge a loan obligation under paragraph (c)(1)(iv)(A) of this section must provide the lender with the disbursement dates of the underlying loans if the lender does not possess that information.
(2) After being notified by the borrower or the borrower's representative that the borrower claims to be totally and permanently disabled, the lender promptly requests that the borrower or the borrower's representative submit, on a form approved by the Secretary, a certification by a physician, who is a doctor of medicine or osteopathy and legally authorized to practice in a State, that the borrower is totally and permanently disabled as defined in § 682.200(b).
(3) The lender must continue collection activities until it receives either the certification of total and permanent disability from a physician or a letter from a physician stating that the certification has been requested and that additional time is needed to determine if the borrower is totally and permanently disabled. Except as provided in paragraph (c)(5) or (c)(7) of this section, after receiving the physician's certification or letter the lender may not attempt to collect from the borrower or any endorser.
(4) The lender must submit a disability claim to the guaranty agency if the borrower submits a certification by a physician and the lender makes a determination that the certification supports the conclusion that the borrower meets the criteria for a total and permanent disability discharge, as defined in § 682.200(b).
(5) If the lender determines that a borrower who claims to be totally and permanently disabled is not totally and permanently disabled, or if the lender does not receive the physician's certification of total and permanent disability within 60 days of the receipt of the physician's letter requesting additional time, as described in paragraph (c)(3) of this section, the lender must resume collection and is deemed to have exercised forbearance of payment of both principal and interest from the date collection activity was suspended. The lender may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period.
(6) The guaranty agency must pay a claim submitted by the lender if the guaranty agency has reviewed the application and determined that it is complete and that it supports the conclusion that the borrower meets the criteria for a total and permanent disability discharge, as defined in § 682.200(b).
(7) If the guaranty agency does not pay the disability claim, the guaranty agency must return the claim to the lender with an explanation of the basis for the agency's denial of the claim. Upon receipt of the returned claim, the lender must notify the borrower that the application for a disability discharge has been denied, provide the basis for the denial, and inform the borrower that the lender will resume collection on the loan. The lender is deemed to have exercised forbearance of both principal and interest from the date collection activity was suspended until the first payment due date. The lender may capitalize, in accordance
(8) If the guaranty agency pays the disability claim, the lender must notify the borrower that the loan will be assigned to the Secretary for determination of eligibility for a total and permanent disability discharge.
(9) After receiving a claim payment from the guaranty agency, the lender must forward to the guaranty agency any payments subsequently received from or on behalf of the borrower.
(10) The Secretary reimburses the guaranty agency for a disability claim paid to the lender after the agency pays the claim to the lender.
(11) The guaranty agency must assign the loan to the Secretary after the guaranty agency pays the disability claim.
(12) If the Secretary determines that the certification and information provided by the borrower do not support the conclusion that the borrower meets the criteria for a total and permanent disability discharge, the Secretary notifies the borrower that the application for a disability discharge has been denied, and that the loan is due and payable under the terms of the promissorynote.
(13) If the Secretary makes an initial determination that the borrower is totally and permanently disabled, the Secretary notifies the borrower that the loan is conditionally discharged and that the conditional discharge period will last for up to three years after the date the borrower became totally and permanently disabled as certified under § 682.402(c)(2). The notification identifies the conditions of the conditional discharge period specified in paragraphs (c)(13) through (c)(16) of this section and specifies that all or part of the three-year period may predate the Secretary's initial determination.
(14) During the conditional discharge period, the borrower—
(i) Is not required to make any payments on the loan;
(ii) Is not considered delinquent or in default on the loan, unless the borrower was delinquent or in default at the time the conditional discharge was granted;
(iii) Must promptly notify the Secretary of any changes in address or phone number;
(iv) Must promptly notify the Secretary if the borrower's annual earnings from employment exceed the amount specified in paragraph (c)(1)(ii)(A) of this section; and
(v) Must provide the Secretary, upon request, with additional documentation or information related to the borrower's eligibility for discharge under this section.
(15) If, during and at the end of the conditional discharge period, the borrower continues to satisfy the eligibility criteria for a total and permanent disability discharge, as described in § 682.402(c)(1)(ii), the balance of the loan is discharged.
(16) If, at any time during the three-year conditional discharge period, the borrower does not continue to meet the eligibility requirements for a total and permanent disability discharge, the Secretary resumes collection activity on the loan. The Secretary does not require the borrower to pay any interest that accrued on the loan from the date of the initial determination described in paragraph (c)(13) of this section through the end of the conditional discharge period.
(d)
(ii) For purposes of the closed school discharge authorized by this section—
(A) A school's closure date is the date that the school ceases to provide educational instruction in all programs, as determined by the Secretary;
(B) The term “borrower” includes all endorsers on a loan; and
(C) A “school” means a school's main campus or any location or branch of the main campus, regardless of whether the school or its location or branch is considered eligible.
(2)
(ii) A discharge of a loan under paragraph (d) of this section qualifies the borrower for reimbursement of amounts paid voluntarily or through enforced collection on a loan obligation discharged under paragraph (d) of this section.
(iii) A borrower who has defaulted on a loan discharged under paragraph (d) of this section is not regarded as in default on the loan after discharge, and is eligible to receive assistance under the Title IV, HEA programs.
(iv) A discharge of a loan under paragraph (d) of this section must be reported by the loan holder to all credit reporting agencies to which the holder previously reported the status of the loan, so as to delete all adverse credit history assigned to the loan.
(3)
(i) Whether the student has made a claim with respect to the school's closing with any third party, such as the holder of a performance bond or a tuition recovery program, and if so, the amount of any payment received by the borrower (or student) or credited to the borrower's loan obligation;
(ii) That the borrower (or the student for whom a parent received a PLUS loan)—
(A) Received, on or after January 1, 1986, the proceeds of any disbursement of a loan disbursed, in whole or in part, on or after January 1, 1986 to attend a school;
(B) Did not complete the educational program at that school because the school closed while the student was enrolled or on an approved leave of absence in accordance with § 682.605(c), or the student withdrew from the school not more than 90 days before the school closed; and
(C) Did not complete the program of study through a teach-out at another school or by transferring academic credits or hours earned at the closed school to another school;
(iii) That the borrower agrees to provide, upon request by the Secretary or the Secretary's designee, other documentation reasonably available to the borrower that demonstrates, to the satisfaction of the Secretary or the Secretary's designee, that the student meets the qualifications in paragraph (d) of this section; and
(iv) That the borrower agrees to cooperate with the Secretary or the Secretary's designee in enforcement actions in accordance with paragraph (d)(4) of this section, and to transfer any right to recovery against a third party in accordance with paragraph (d)(5) of this section.
(4)
(A) Provide testimony regarding any representation made by the borrower to support a request for discharge; and
(B) Produce any documentation reasonably available to the borrower with
(ii) The Secretary revokes the discharge, or denies the request for discharge, of a borrower who—
(A) Fails to provide testimony, sworn statements, or documentation to support material representations made by the borrower to obtain the discharge; or
(B) Provides testimony, a sworn statement, or documentation that does not support the material representations made by the borrower to obtain the discharge.
(5)
(ii) The provisions of paragraph (d) of this section apply notwithstanding any provision of State law that would otherwise restrict transfer of such rights by the borrower (or student), limit or prevent a transferee from exercising those rights, or establish procedures or a scheme of distribution that would prejudice the Secretary's ability to recover on those rights.
(iii) Nothing in this section shall be construed as limiting or foreclosing the borrower's (or student's) right to pursue legal and equitable relief regarding disputes arising from matters otherwise unrelated to the loan discharged.
(6)
(B) If a loan subject to paragraph (d) of this section was discharged in part in accordance with the Secretary's “Closed School Policy” as authorized by section IV of Bulletin 89-G-159, the guaranty agency shall initiate the discharge of the remaining balance of the loan not later than August 13, 1994.
(C) A guaranty agency shall review its records and identify all schools that appear to have closed on or after January 1, 1986 and prior to June 13, 1994, and shall identify the loans made to any borrower (or student) who appears to have been enrolled at the school on the school closure date or who withdrew not more than 90 days prior to the closure date.
(D) A guaranty agency shall notify the Secretary immediately if it determines that a school not previously known to have closed appears to have closed, and, within 30 days of making that determination, notify all lenders participating in its program to suspend collection efforts against individuals with respect to loans made for attendance at the closed school, if the student to whom (or on whose behalf) a loan was made, appears to have been enrolled at the school on the closing date, or withdrew not more than 90 days prior to the date the school appears to have closed. Within 30 days after receiving confirmation of the date of a school's closure from the Secretary, the agency shall—
(
(
(E) If a loan identified under paragraph (d)(6)(i)(D)(
(F) If a loan identified under paragraph (d)(6)(i)(D)(
(G) If the guaranty agency determines that a borrower identified in paragraph (d)(6)(i)(E) or (F) of this section has satisfied all of the conditions required for a discharge, the agency shall notify the borrower in writing of that determination within 30 days after making that determination.
(H) If the guaranty agency determines that a borrower identified in paragraph (d)(6)(i)(E) or (F) of this section does not qualify for a discharge, the agency shall notify the borrower in writing of that determination and the reasons for it within 30 days after the date the agency—
(
(
(
(
(
(I) If a borrower described in paragraph (d)(6)(i)(E) or (F) of this section fails to submit the written request and sworn statement described in paragraph (d)(3) of this section within 60 days of being notified of that option, the guaranty agency shall resume collection and shall be deemed to have exercised forbearance of payment of principal and interest from the date it suspended collection activity. The agency may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period.
(J) A borrower's request for discharge may not be denied solely on the basis of failing to meet any time limits set by the lender, guaranty agency, or the Secretary.
(ii)
(B) If a guaranty agency determines that a school appears to have closed, it shall, within 30 days of making that determination, notify all lenders participating in its program to suspend collection efforts against individuals with respect to loans made for attendance at the closed school, if the student to whom (or on whose behalf) a loan was
(
(
(C) If a loan identified under paragraph (d)(6)(ii)(B)(
(D) If a loan identified under paragraph (d)(6)(ii)(B)(
(E) If the guaranty agency determines that a borrower identified in paragraph (d)(6)(ii)(C) or (D) of this section has satisfied all of the conditions required for a discharge, the agency shall notify the borrower in writing of that determination within 30 days after making that determination.
(F) If the guaranty agency determines that a borrower identified in paragraph (d)(6)(ii)(C) or (D) of this section does not qualify for a discharge, the agency shall notify the borrower in writing of that determination and the reasons for it within 30 days after the date the agency—
(
(
(
(
(
(G) Upon receipt of a closed school discharge claim filed by a lender, the agency shall review the borrower's request and supporting sworn statement in light of information available from the records of the agency and from other sources, including other guaranty agencies, state authorities, and cognizant accrediting associations, and shall take the following actions—
(
(
(H) If a borrower fails to submit the written request and sworn statement described in paragraph (d)(3) of this section within 60 days of being notified of that option, the lender or guaranty agency shall resume collection and shall be deemed to have exercised forbearance of payment of principal and interest from the date it suspended collection activity. The lender or guaranty agency may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period.
(I) A borrower's request for discharge may not be denied solely on the basis of failing to meet any time limits set by the lender, guaranty agency, or the Secretary.
(7)
(ii) If the borrower fails to submit the written request and sworn statement described in paragraph (d)(3) of this section within 60 days after being notified of that option, the lender shall resume collection and shall be deemed to have exercised forbearance of payment of principal and interest from the date the lender suspended collection activity. The lender may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period.
(iii) The lender shall file a closed school claim with the guaranty agency in accordance with § 682.402(g) no later than 60 days after the lender receives the borrower's written request and sworn statement described in paragraph (d)(3) of this section. If a lender receives a payment made by or on behalf of the borrower on the loan after the lender files a claim on the loan with the guaranty agency, the lender shall forward the payment to the guaranty agency within 30 days of its receipt. The lender shall assist the guaranty agency and the borrower in determining whether the borrower is eligible for discharge of the loan.
(iv) Within 30 days after receiving reimbursement from the guaranty agency for a closed school claim, the lender shall notify the borrower that the loan obligation has been discharged, and request that all credit bureaus to which it previously reported the status of the loan delete all adverse credit history assigned to the loan.
(v) Within 30 days after being notified by the guaranty agency that the borrower's request for a closed school discharge has been denied, the lender shall resume collection and notify the borrower of the reasons for the denial. The lender shall be deemed to have exercised forbearance of payment of principal and interest from the date the lender suspended collection activity, and may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period.
(8)
(i) Borrower received a discharge on a loan pursuant to 34 CFR 674.33(g) under the Federal Perkins Loan Program, or 34 CFR 685.213 under the William D. Ford Federal Direct Loan Program; or
(ii) The Secretary or the guaranty agency, with the Secretary's permission, determines that the borrower qualifies for a discharge based on information in the Secretary or guaranty agency's possession.
(e)
(A) Certified the student's eligibility for a FFEL Program loan on the basis of ability to benefit from its training and the student did not meet the applicable requirements described in 34 CFR part 668 and section 484(d) of the Act, as applicable and as described in paragraph (e)(13) of this section; or
(B) Signed the borrower's name without authorization by the borrower on the loan application or promissory note.
(ii) The Secretary discharges the obligation of a borrower with respect to a loan disbursement for which the school, without the borrower's authorization, endorsed the borrower's loan check or authorization for electronic funds transfer, unless the student for whom the loan was made received the proceeds of the loan either by actual delivery of the loan funds or by a credit in the amount of the contested disbursement applied to charges owed to the school for that portion of the educational program completed by the student. However, the Secretary does not reimburse the lender with respect to any amount disbursed by means of a check bearing an unauthorized endorsement unless the school also executed the application or promissory note for that loan for the named borrower without that individual's consent.
(2)
(ii) A discharge of a loan under paragraph (e) of this section qualifies the borrower for reimbursement of amounts paid voluntarily or through enforced collection on a loan obligation discharged under paragraph (e) of this section.
(iii) A borrower who has defaulted on a loan discharged under paragraph (e) of this section is not regarded as in default on the loan after discharge, and is eligible to receive assistance under the Title IV, HEA programs.
(iv) A discharge of a loan under paragraph (e) of this section is reported by the loan holder to all credit reporting agencies to which the holder previously reported the status of the loan, so as to delete all adverse credit history assigned to the loan.
(v) Discharge under paragraph (e)(1)(ii) of this section qualifies the borrower for relief only with respect to the amount of the disbursement discharged.
(3)
(i) State whether the student has made a claim with respect to the school's false certification with any third party, such as the holder of a performance bond or a tuition recovery program, and if so, the amount of any payment received by the borrower (or student) or credited to the borrower's loan obligation;
(ii) In the case of a borrower requesting a discharge based on defective testing of the student's ability to benefit, state that the borrower (or the student for whom a parent received a PLUS loan)—
(A) Received, on or after January 1, 1986, the proceeds of any disbursement of a loan disbursed, in whole or in part, on or after January 1, 1986 to attend a school; and
(B) Was admitted to that school on the basis of ability to benefit from its training and did not meet the applicable requirements for admission on the
(iii) In the case of a borrower requesting a discharge because the school signed the borrower's name on the loan application or promissory note—
(A) State that the signature on either of those documents was not the signature of the borrower; and
(B) Provide five different specimens of his or her signature, two of which must be not earlier or later than one year before or after the date of the contested signature;
(iv) In the case of a borrower requesting a discharge because the school, without authorization of the borrower, endorsed the borrower's name on the loan check or signed the authorization for electronic funds transfer or master check, the borrower shall—
(A) Certify that he or she did not endorse the loan check or sign the authorization for electronic funds transfer or master check, or authorize the school to do so;
(B) Provide five different specimens of his or her signature, two of which must be not earlier or later than one year before or after the date of the contested signature; and
(C) State that the proceeds of the contested disbursement were not received either through actual delivery of the loan funds or by a credit in the amount of the contested disbursement applied to charges owed to the school for that portion of the educational program completed by the student;
(v) That the borrower agrees to provide upon request by the Secretary or the Secretary's designee, other documentation reasonably available to the borrower, that demonstrates, to the satisfaction of the Secretary or the Secretary's designee, that the student meets the qualifications in paragraph (e) of this section; and
(vi) That the borrower agrees to cooperate with the Secretary or the Secretary's designee in enforcement actions in accordance with paragraph (e)(4) of this section, and to transfer any right to recovery against a third party in accordance with paragraph (e)(5) of this section.
(4)
(A) Provide testimony regarding any representation made by the borrower to support a request for discharge; and
(B) Produce any documentation reasonably available to the borrower with respect to those representations and any sworn statement required by the Secretary with respect to those representations and documents.
(ii) The Secretary revokes the discharge, or denies the request for discharge, of a borrower who—
(A) Fails to provide testimony, sworn statements, or documentation to support material representations made by the borrower to obtain the discharge; or
(B) Provides testimony, a sworn statement, or documentation that does not support the material representations made by the borrower to obtain the discharge.
(5)
(ii) The provisions of paragraph (e) of this section apply notwithstanding any
(iii) Nothing in this section shall be construed as limiting or foreclosing the borrower's (or student's) right to pursue legal and equitable relief regarding disputes arising from matters otherwise unrelated to the loan discharged.
(6)
(ii) If the guaranty agency receives information it believes to be reliable indicating that a borrower whose loan is held by the agency may be eligible for a discharge under paragraph (e) of this section, the agency shall immediately suspend any efforts to collect from the borrower on any loan received for the program of study for which the loan was made (but may continue to receive borrower payments), and inform the borrower of the procedures for requesting a discharge.
(iii) If the borrower fails to submit the written request and sworn statement described in paragraph (e)(3) of this section within 60 days of being notified of that option, the guaranty agency shall resume collection and shall be deemed to have exercised forbearance of payment of principal and interest from the date it suspended collection activity. The agency may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period.
(iv) Upon receipt of a discharge claim filed by a lender or a request submitted by a borrower with respect to a loan held by the guaranty agency, the agency shall have up to 90 days to determine whether the discharge should be granted. The agency shall review the borrower's request and supporting sworn statement in light of information available from the records of the agency and from other sources, including other guaranty agencies, state authorities, and cognizant accrediting associations.
(v) A borrower's request for discharge and sworn statement may not be denied solely on the basis of failing to meet any time limits set by the lender, the Secretary or the guaranty agency.
(7)
(ii) If the agency determines that the borrower satisfies the requirements for discharge under paragraph (e) of this section, it shall, not later than 30 days after the agency makes that determination, pay the claim in accordance with § 682.402(h) and—
(A) Notify the borrower that his or her liability with respect to the amount of the loan has been discharged, and that the lender has been informed of the actions required under paragraph (e)(7)(ii)(C) of this section;
(B) Refund to the borrower all amounts paid by the borrower to the lender or the agency with respect to the discharged loan amount, including any late fees or collection charges imposed by the lender or agency related to the discharged loan amount; and
(C) Notify the lender that the borrower's liability with respect to the amount of the loan has been discharged, and that the lender must—
(
(
(iii) If the agency determines that the borrower does not qualify for a discharge, it shall, within 30 days after making that determination—
(A) Notify the lender that the borrower's liability on the loan is not discharged and that, depending on the borrower's decision under paragraph (e)(7)(iii)(B) of this section, the loan shall either be returned to the lender or paid as a default claim; and
(B) Notify the borrower that the borrower does not qualify for discharge, and state the reasons for that conclusion. The agency shall advise the borrower that he or she remains obligated to repay the loan and warn the borrower of the consequences of default, and explain that the borrower will be considered to be in default on the loan unless the borrower submits a written statement to the agency within 30 days stating that the borrower—
(
(
(iv) Within 30 days after receiving the borrower's written statement described in paragraph (e)(7)(iii)(B)(
(v) Within 30 days after receiving the borrower's request for review by the Secretary, the agency shall forward the claim file to the Secretary for his review and take the actions required under paragraph (e)(11) of this section.
(vi) The agency shall pay a default claim to the lender within 30 days after the borrower fails to return either of the written statements described in paragraph (e)(7)(iii)(B) of this section.
(8)
(ii) If the agency determines that a borrower who asserts that he or she did not endorse the loan check satisfies the requirements for discharge under paragraph (e)(3)(iv) of this section, it shall, within 30 days after making that determination—
(A) Notify the borrower that his or her liability with respect to the amount of the contested disbursement of the loan has been discharged, and that the lender has been informed of the actions required under paragraph (e)(8)(ii)(B) of this section;
(B) Notify the lender that the borrower's liability with respect to the amount of the contested disbursement of the loan has been discharged, and that the lender must—
(
(
(
(
(C) Transfer to the lender the borrower's written assignment of any rights the borrower may have against
(iii) If the agency determines that a borrower who asserts that he or she did not sign the electronic funds transfer or master check authorization satisfies the requirements for discharge under paragraph (e)(3)(iv) of this section, it shall, within 30 days after making that determination, pay the claim in accordance with § 682.402(h) and—
(A) Notify the borrower that his or her liability with respect to the amount of the contested disbursement of the loan has been discharged, and that the lender has been informed of the actions required under paragraph (e)(8)(iii)(C) of this section;
(B) Refund to the borrower all amounts paid by the borrower to the lender or the agency with respect to the discharged loan amount, including any late fees or collection charges imposed by the lender or agency related to the discharged loan amount; and
(C) Notify the lender that the borrower's liability with respect to the contested disbursement of the loan has been discharged, and that the lender must—
(
(
(iv) If the agency determines that the borrower does not qualify for a discharge, it shall, within 30 days after making that determination—
(A) Notify the lender that the borrower's liability on the loan is not discharged and that, depending on the borrower's decision under paragraph (e)(8)(iv)(B) of this section, the loan shall either be returned to the lender or paid as a default claim; and
(B) Notify the borrower that the borrower does not qualify for discharge, and state the reasons for that conclusion. The agency shall advise the borrower that he or she remains obligated to repay the loan and warn the borrower of the consequences of default, and explain that the borrower will be considered to be in default on the loan unless the borrower submits a written statement to the agency within 30 days stating that the borrower—
(
(
(v) Within 30 days after receiving the borrower's written statement described in paragraph (e)(8)(iv)(B)(
(vi) Within 30 days after receiving the borrower's request for review by the Secretary, the agency shall forward the claim file to the Secretary for his review and take the actions required under paragraph (e)(11) of this section.
(vii) The agency shall pay a default claim to the lender within 30 days after the borrower fails to return either of the written statements described in paragraph (e)(8)(iv)(B) of this section.
(9)
(ii) If the agency determines that the borrower satisfies the requirements for discharge under paragraph (e)(3) of this section, it shall immediately terminate any collection efforts against the borrower with respect to the discharged loan amount and any charges imposed or costs incurred by the agency related to the discharged loan amount that the borrower is, or was otherwise obligated to pay and, not later than 30 days after the agency makes the determination
(A) Notify the borrower that his or her liability with respect to the amount of the loan has been discharged;
(B) Report to all credit reporting agencies to which the agency previously reported the status of the loan, so as to delete all adverse credit history assigned to the loan; and
(C) Refund to the borrower all amounts paid by the borrower to the lender or the agency with respect to the discharged loan amount, including any late fees or collection charges imposed by the lender or agency related to the discharged loan amount.
(iii) If the agency determines that the borrower does not qualify for a discharge, it shall, within 30 days after making that determination, notify the borrower that the borrower's liability with respect to the amount of the loan is not discharged, state the reasons for that conclusion, and if the borrower is not then making payments in accordance with a repayment arrangement with the agency on the loan, advise the borrower of the consequences of continued failure to reach such an arrangement, and that collection action will resume on the loan unless within 30 days the borrower—
(A) Acknowledges the debt and, if payments are due, reaches a satisfactory arrangement to repay the loan or resumes making payments under such an arrangement to the agency; or
(B) Requests the Secretary to review the agency's decision.
(iv) Within 30 days after receiving the borrower's request for review by the Secretary, the agency shall forward the borrower's discharge request and all relevant documentation to the Secretary for his review and take the actions required under paragraph (e)(11) of this section.
(v) The agency shall resume collection action if within 30 days of giving notice of its determination the borrower fails to seek review by the Secretary or agree to repay the loan.
(10)
(ii) If the agency determines that a borrower who asserts that he or she did not endorse the loan check satisfies the requirements for discharge under paragraph (e)(3)(iv) of this section, it shall refund to the Secretary the amount of reinsurance payment received with respect to the amount discharged on that loan less any repayments made by the lender under paragraph (e)(10)(ii)(D)(
(A) Notify the borrower that his or her liability with respect to the amount of the contested disbursement of the loan has been discharged;
(B) Report to all credit reporting agencies to which the agency previously reported the status of the loan, so as to delete all adverse credit history assigned to the loan;
(C) Refund to the borrower all amounts paid by the borrower to the lender or the agency with respect to the discharged loan amount, including any late fees or collection charges imposed by the lender or agency related to the discharged loan amount;
(D) Notify the lender to whom a claim payment was made that the lender must refund to the Secretary, within 30 days—
(
(
(E) Notify the lender to whom a claim payment was made that the lender must, within 30 days, reimburse the agency for the amount of the loan that was discharged, minus the amount of borrower payments made to the lender
(F) Transfer to the lender the borrower's written assignment of any rights the borrower may have against third parties with respect to the loan disbursement that was discharged.
(iii) In the case of a borrower who requests a discharge because he or she did not sign the electronic funds transfer or master check authorization, if the agency determines that the borrower meets the conditions for discharge, it shall immediately terminate any collection efforts against the borrower with respect to the discharged loan amount and any charges imposed or costs incurred by the agency related to the discharged loan amount that the borrower is, or was, otherwise obligated to pay, and within 30 days after making that determination—
(A) Notify the borrower that his or her liability with respect to the amount of the contested disbursement of the loan has been discharged;
(B) Refund to the borrower all amounts paid by the borrower to the lender or the agency with respect to the discharged loan amount, including any late fees or collection charges imposed by the lender or agency related to the discharged loan amount; and
(C) Report to all credit reporting agencies to which the lender previously reported the status of the loan, so as to delete all adverse credit history assigned to the loan.
(iv) The agency shall take the actions required under paragraphs (e)(9) (iii) through (v) if the agency determines that the borrower does not qualify for a discharge.
(11)
(ii) The Secretary notifies the agency and the borrower of a determination on review. If the Secretary determines that the borrower is not eligible for a discharge under paragraph (e) of this section, within 30 days after being so informed, the agency shall take the actions described in paragraphs (e)(8) (iv) through (vii) or (e)(9)(iii) through (v) of this section, as applicable.
(iii) If the Secretary determines that the borrower meets the requirements for a discharge under paragraph (e) of this section, the agency shall, within 30 days after being so informed, take the actions required under paragraph (e)(7)(ii), (e)(8)(ii), (e)(8)(iii), (e)(9)(ii), (e)(10)(ii), or (e)(10)(iii) of this section, as applicable.
(12)
(ii) If the borrower fails to submit the written request and sworn statement described in paragraph (e)(3) of this section within 60 days of being notified of that option, the lender shall resume collection and shall be deemed to have exercised forbearance of payment of principal and interest from the date the lender suspended collection activity. The lender may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period.
(iii) The lender shall file a claim with the guaranty agency in accordance with § 682.402(g) no later than 60 days after the lender receives the borrower's written request and sworn statement described in paragraph (e)(3) of this section. If a lender receives a payment made by or on behalf of the borrower on the loan after the lender files a claim on the loan with the guaranty agency, the lender shall forward the payment to the guaranty agency within 30 days of its receipt. The lender shall assist the guaranty agency and the borrower in determining whether
(iv) The lender shall comply with all instructions received from the Secretary or a guaranty agency with respect to loan discharges under paragraph (e) of this section.
(v) The lender shall review a claim that the borrower did not endorse and did not receive the proceeds of a loan check. The lender shall take the actions required under paragraphs (e)(8)(ii)(A) and (B) of this section if it determines that the borrower did not endorse the loan check, unless the lender secures persuasive evidence that the proceeds of the loan were received by the borrower or the student for whom the loan was made, as provided in paragraph (e)(1)(ii). If the lender determines that the loan check was properly endorsed or the proceeds were received by the borrower or student, the lender may consider the borrower's objection to repayment as a statement of intention not to repay the loan, and may file a claim with the guaranty agency for reimbursement on that ground, but shall not report the loan to credit bureaus as in default until the guaranty agency, or, as applicable, the Secretary, reviews the claim for relief. By filing such a claim, the lender shall be deemed to have agreed to the following—
(A) If the guarantor or the Secretary determines that the borrower endorsed the loan check or the proceeds of the loan were received by the borrower or the student, any failure to satisfy due diligence requirements by the lender prior to the filing of the claim that would have resulted in the loss of reinsurance on the loan in the event of default will be waived by the Secretary; and
(B) If the guarantor or the Secretary determines that the borrower did not endorse the loan check and that the proceeds of the loan were not received by the borrower or the student, the lender will comply with the requirements specified in paragraph (e)(8)(ii)(B) of this section.
(vi) Within 30 days after being notified by the guaranty agency that the borrower's request for a discharge has been denied, the lender shall notify the borrower of the reasons for the denial and, if payments are due, resume collection against the borrower. The lender shall be deemed to have exercised forbearance of payment of principal and interest from the date the lender suspended collection activity, and may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period.
(13)
(ii) A student not described in paragraph (e)(13)(i) of this section is considered to have the ability to benefit from training offered by the school if the student—
(A) For periods of enrollment beginning prior to July 1, 1987, was determined to have the ability to benefit from the school's training in accordance with the requirements of 34 CFR 668.6, as in existence at the time the determination was made;
(B) For periods of enrollment beginning between July 1, 1987 and June 30, 1996, achieved a passing grade on a test—
(
(
(C) Successfully completed a program of developmental or remedial education provided by the school; or
(D) For periods of enrollment beginning on or after July 1, 1996 through June 30, 2000—
(
(
(E) For periods of enrollment beginning on or after July 1, 2000—
(
(
(iii) Notwithstanding paragraphs (e)(13)(i) and (ii) of this section, a student did not have the ability to benefit from training offered by the school if—
(A) The school certified the eligibility of the student for a FFEL Program loan; and
(B) At the time of certification, the student would not meet the requirements for employment (in the student's State of residence) in the occupation for which the training program supported by the loan was intended because of a physical or mental condition, age, or criminal record or other reason accepted by the Secretary.
(iv) Notwithstanding paragraphs (e)(13)(i) and (ii) of this section, a student has the ability to benefit from the training offered by the school if the student received a high school diploma or its recognized equivalent prior to enrollment at the school.
(14)
(f)
(2)
(A) Must suspend any collection efforts against any co-maker or endorser if the borrower has filed for relief under Chapters 12 or 13 of the Bankruptcy Code; or
(B) May suspend any collection efforts against any co-maker or endorser if the borrower has filed for relief under Chapters 7 or 11 of the Bankruptcy Code.
(ii) If the lender is notified that a co-maker or endorser has filed a petition for relief in bankruptcy, the lender must immediately suspend any collection efforts outside the bankruptcy proceeding against the co-maker or endorser and—
(A) Must suspend collection efforts against the borrower and any other parties to the note if the co-maker or endorser has filed for relief under Chapters 12 or 13 of the Bankruptcy Code; or
(B) May suspend any collection efforts against the borrower and any other parties to the note if the co-maker or endorser has filed for relief under Chapters 7 or 11 of the Bankruptcy Code.
(3)
(4)
(A) 30 days after the holder receives a notice of first meeting of creditors unless, in the case of a proceeding under chapter 7, the notice states that the borrower has no assets; or
(B) 30 days after the holder receives a notice from the court stating that a chapter 7 no-asset case has been converted to an asset case.
(ii) A guaranty agency that is a state guaranty agency, and on that basis may assert immunity from suit in bankruptcy court, and that does not assign any loans affected by a bankruptcy filing to another guaranty agency—
(A) Is not required to file a proof of claim on a loan already held by the guaranty agency; and
(B) May direct lenders not to file proofs of claim on loans guaranteed by that agency.
(5)
(A) The borrower has filed a petition for relief under chapters 12 or 13 of the Bankruptcy Code; or
(B) The borrower has filed a petition for relief under chapters 7 or 11 of the Bankruptcy Code before October 8, 1998 and the loan has been in repayment for more than seven years (exclusive of any applicable suspension of the repayment period) from the due date of the first payment until the date of the filing of the petition for relief; or
(C) The borrower has begun an action to have the loan obligation determined to be dischargeable on grounds of undue hardship.
(ii) In cases not described in paragraph (f)(5)(i) of this section, the lender shall continue to hold the loan notwithstanding the bankruptcy proceeding. Once the bankruptcy proceeding is completed or dismissed, the lender shall treat the loan as if the lender had exercised forbearance as to repayment of principal and interest accrued from the date of the borrower's filing of the bankruptcy petition until the date the lender is notified that the bankruptcy proceeding is completed or dismissed.
(g)
(i) The original or a true and exact copy of the promissory note.
(ii) The loan application, if a separate loan application was provided to the lender.
(iii) In the case of a death claim, an original or certified death certificate, or other documentation supporting the discharge request that formed the basis for the determination of death.
(iv) In the case of a disability claim, a copy of the certification of disability described in paragraph (c)(2) of this section.
(v) In the case of a bankruptcy claim—
(A) Evidence that a bankruptcy petition has been filed, all pertinent documents sent to or received from the bankruptcy court by the lender, and an assignment to the guaranty agency of any proof of claim filed by the lender regarding the loan; and
(B) A statement of any facts of which the lender is aware that may form the basis for an objection or exception to the discharge of the borrower's loan obligation in bankruptcy and all documents supporting those facts.
(vi) In the case of a closed school claim, the documentation described in paragraph (d)(3) of this section, or any other documentation as the Secretary may require;
(vii) In the case of a false certification claim, the documentation described in paragraph (e)(3) of this section.
(2)
(i) Within 60 days of the date on which the lender determines that a borrower (or the student on whose behalf a parent obtained a PLUS loan) has died, or the lender determines that the borrower is totally and permanently disabled.
(ii) In the case of a closed school claim, the lender shall file a claim with the guaranty agency no later than 60 days after the borrower submits to the lender the written request and sworn statement described in paragraph (d)(3) of this section or after the lender is notified by the Secretary or the Secretary's designee or by the guaranty agency to do so.
(iii) In the case of a false certification claim, the lender shall file a claim with the guaranty agency no later than 60 days after the borrower submits to the lender the written request and sworn statement described in paragraph (e)(3) of this section or after the lender is notified by the Secretary or the Secretary's designee or by the guaranty agency to do so.
(iv) A lender shall file a bankruptcy claim with the guaranty agency by the earlier of—
(A) 30 days after the date on which the lender receives notice of the first
(B) 15 days after the lender is served with a complaint or motion to have the loan determined to be dischargeable on grounds of undue hardship, or, if the lender secures an extension of time within which an answer may be filed, 25 days before the expiration of that extended period, whichever is later.
(h)
(A) Not later than 45 days after the claim was filed by the lender for death and bankruptcy claims; and
(B) Not later than 90 days after the claim was filed by the lender for disability, closed school, or false certification claims.
(ii) In the case of a bankruptcy claim, the guaranty agency shall, upon receipt of the claim from the lender, immediately take those actions required under paragraph (i) of this section to oppose the discharge of the loan by the bankruptcy court.
(iii) In the case of a closed school claim or a false certification claim based on the determination that the borrower did not sign the loan application, the promissory note, or the authorization for the electronic transfer of loan funds, or that the school failed to test, or improperly tested, the student's ability to benefit, the guaranty agency shall document its determination that the borrower is eligible for discharge under paragraphs (d) or (e) of this section and pay the borrower or the holder the amount determined under paragraph (h)(2) of this section.
(iv) In reviewing a claim under this section, the issue of confirmation of subsequent loans under an MPN will not be reviewed and a claim will not be denied based on the absence of any evidence relating to confirmation in a particular loan file. However, if a court rules that a loan is unenforceable solely because of the lack of evidence of the confirmation process or processes, insurance benefits must be repaid.
(2)(i) The amount of loss payable—
(A) On a death or disability claim is equal to the sum of the remaining principal balance and interest accrued on the loan, collection costs incurred by the lender and applied to the borrower's account within 30 days of the date those costs were actually incurred, and unpaid interest up to the date the lender should have filed the claim.
(B) On a bankruptcy claim is equal to the unpaid balance of principal and interest determined in accordance with paragraph (h)(3) of this section.
(ii) The amount of loss payable to a lender on a closed school claim or on a false certification claim is equal to the sum of the remaining principal balance and interest accrued on the loan, collection costs incurred by the lender and applied to the borrower's account within 30 days of the date those costs were actually incurred, and unpaid interest determined in accordance with paragraph (h)(3) of this section.
(iii) In the case of a closed school or false certification claim filed by a lender on an outstanding loan owed by the borrower, on the same date that the agency pays a claim to the lender, the agency shall pay the borrower an amount equal to the amount paid on the loan by or on behalf of the borrower, less any school tuition refunds or payments received by the holder or the borrower from a tuition recovery fund, performance bond, or other third-party source.
(iv) In the case of a claim filed by a lender based on a request received from a borrower whose loan had been repaid in full by, or on behalf of the borrower to the lender, on the same date that the agency notifies the lender that the borrower is eligible for a closed school or false certification discharge, the agency shall pay the borrower an amount equal to the amount paid on the loan by or on behalf of the borrower, less any school tuition refunds or payments received by the holder or the borrower from a tuition recovery fund, performance bond, or other third-party source.
(v) In the case of a loan that has been included in a Consolidation Loan, the
(A) The amount paid on the loan by or on behalf of the borrower at the time the loan was paid through consolidation;
(B) The amount paid by the consolidating lender to the holder of the loan when it was repaid through consolidation; minus
(C) Any school tuition refunds or payments received by the holder or the borrower from a tuition recovery fund, performance bond, or other third-party source if those refunds or payments were—
(
(
(3)
(i) During the period before the claim is filed, not to exceed the period provided for in paragraph (g)(2) of this section for filing the claim.
(ii) During a period not to exceed 30 days following the receipt date by the lender of a claim returned by the guaranty agency for additional documentation necessary for the claim to be approved by the guaranty agency.
(iii) During the period required by the guaranty agency to approve the claim and to authorize payment or to return the claim to the lender for additional documentation not to exceed—
(A) 45 days for death or bankruptcy claims; or
(B) 90 days for disability, closed school, or false certification claims.
(i)
(ii) In all other cases, the guaranty agency must determine whether repayment under either the current repayment schedule or any adjusted schedule authorized under this part would impose an undue hardship on the borrower and his or her dependents.
(iii) If the guaranty agency determines that repayment would not constitute an undue hardship, the guaranty agency must then determine whether the expected costs of opposing the discharge petition would exceed one-third of the total amount owed on the loan, including principal, interest, late charges, and collection costs. If the guaranty agency has determined that the expected costs of opposing the discharge petition will exceed one-third of the total amount of the loan, it may, but is not required to, engage in the activities described in paragraph (i)(1)(iv) of this section.
(iv) The guaranty agency must use diligence and may assert any defense consistent with its status under applicable law to avoid discharge of the loan. Unless discharge would be more effectively opposed by not taking the following actions, the agency must—
(A) Oppose the borrower's petition for a determination of dischargeability; and
(B) If the borrower is in default on the loan, seek a judgment for the amount owed on the loan.
(v) In opposing a petition for a determination of dischargeability on the grounds of undue hardship, a guaranty agency may agree to discharge of a portion of the amount owed on a loan if it reasonably determines that the agreement is necessary in order to obtain a judgment on the remainder of the loan.
(2)
(i) The agency is not required to respond to a proposed plan that—
(A) Provides for repayment of the full outstanding balance of the loan;
(B) Makes no provision with regard to the loan or to general unsecured claims.
(ii) In any other case, the agency shall determine, based on a review of its own records and documents filed by the debtor in the bankruptcy proceeding—
(A) What part of the loan obligation will be discharged under the plan as proposed;
(B) Whether the plan itself or the classification of the loan under the plan meets the requirements of 11 U.S.C. 1129, 1225, or 1325, as applicable; and
(C) Whether grounds exist under 11 U.S.C. 1112, 1208, or 1307, as applicable, to move for conversion or dismissal of the case.
(iii) If the agency determines that grounds exist to challenge the proposed plan, the agency shall, as appropriate, object to the plan or move to dismiss the case, if—
(A) The costs of litigation of these actions are not reasonably expected to exceed one-third of the amount of the loan to be discharged under the plan; and
(B) With respect to an objection under 11 U.S.C. 1325, the additional amount that may be recovered under the plan if an objection is successful can reasonably be expected to equal or exceed the cost of litigating the objection.
(iv) The agency shall monitor the debtor's performance under a confirmed plan. If the debtor fails to make payments required under the plan or seeks but does not demonstrate entitlement to discharge under 11 U.S.C. 1328(b), the agency shall oppose any requested discharge or move to dismiss the case if the costs of litigation together with the costs incurred for objections to the plan are not reasonably expected to exceed one-third of the amount of the loan to be discharged under the plan.
(j)
(i) The entry of an order denying or revoking discharge or dismissing a proceeding under any chapter.
(ii) A ruling in a proceeding under chapter 7 or 11 that the loan is not dischargeable under 11 U.S.C. 523(a)(8) or other applicable law.
(iii) The entry of an order granting discharge under chapter 12 or 13, or confirming a plan of arrangement under chapter 11, unless the court determined that the loan is dischargeable under 11 U.S.C. 523(a)(8) on grounds of undue hardship.
(2) The lender may capitalize all outstanding interest accrued on a loan purchased under paragraph (j) of this section to cover any periods of delinquency prior to the bankruptcy action through the date the lender purchases the loan and receives the supporting loan documentation from the guaranty agency.
(k)
(A) A determination by the court that the loan is dischargeable under 11 U.S.C. 523(a)(8) with respect to a proceeding initiated under chapter 7 or chapter 11; or
(B) With respect to any other loan, after the agency pays the claim to the lender.
(ii) The guaranty agency shall refund to the Secretary the full amount of reimbursement received from the Secretary on a loan that a lender repurchases under this section.
(2) The Secretary pays a death, disability, bankruptcy, closed school, or false certification claim in an amount determined under § 682.402(k)(5) on a loan held by a guaranty agency after the agency has paid a default claim to the lender thereon and received payment under its reinsurance agreement. The Secretary reimburses the guaranty agency only if—
(i) The guaranty agency determines that the borrower (or the student for whom a parent obtained a PLUS loan or each of the co-makers of a PLUS loan) has died, or the borrower (or each of the co-makers of a PLUS loan) has become totally and permanently disabled since applying for the loan, or has filed for relief in bankruptcy, in accordance with the procedures in paragraphs (b), (c), or (f) of this section, or the student was unable to complete an educational program because the school closed, or the borrower's eligibility to borrow (or the student's eligibility in the case of a PLUS loan) was falsely certified by an eligible school. For purposes of this paragraph, references to the “lender” and “guaranty agency” in paragraphs (b) through (f) of this section mean the guaranty agency and the Secretary respectively;
(ii) In the case of a Stafford, SLS, or PLUS loan, the guaranty agency determines that the borrower (or the student for whom a parent obtained a PLUS loan, or each of the co-makers of a PLUS loan) has died, or the borrower (or each of the co-makers of a PLUS loan) has become totally and permanently disabled since applying for the loan, or has filed the petition for relief in bankruptcy within 10 years of the date the borrower entered repayment, exclusive of periods of deferment or periods of forbearance granted by the lender that extended the 10-year maximum repayment period, or the borrower (or the student for whom a parent received a PLUS loan) was unable to complete an educational program because the school closed, or the borrower's eligibility to borrow (or the student's eligibility in the case of a PLUS loan) was falsely certified by an eligible school;
(iii) In the case of a Consolidation loan, the borrower (or one of the co-makers) has died, is determined to be totally and permanently disabled under § 682.402(c), or has filed the petition for relief in bankruptcy within the maximum repayment period described in § 682.209(h)(2), exclusive of periods of deferment or periods of forbearance granted by the lender that extended the maximum repayment period;
(iv) The guaranty agency has not written off the loan in accordance with the procedures established by the agency under § 682.410(b)(6)(x), except for closed school and false certification discharges; and
(v) The guaranty agency has exercised due diligence in the collection of the loan in accordance with the procedures established by the agency under § 682.410(b)(6)(x), until the borrower (or the student for whom a parent obtained a PLUS loan, or each of the co-makers of a PLUS loan) has died, or the borrower (or each of the co-makers of a PLUS loan) has become totally and permanently disabled or filed a Chapter 12 or Chapter 13 petition, or had the loan discharged in bankruptcy, or for closed school and false certification claims, the guaranty agency receives a request for discharge from the borrower or another party.
(3) [Reserved]
(4) Within 30 days of receiving reimbursement for a closed school or false certification claim, the guaranty agency shall pay—
(i) The borrower an amount equal to the amount paid on the loan by or on behalf of the borrower, less any school tuition refunds or payments received by the holder, guaranty agency, or the borrower from a tuition recovery fund, performance bond, or other third-party source; or
(ii) The amount determined under paragraph (h)(2)(iv) of this section to the holder of the borrower's Consolidation Loan.
(5) The Secretary pays the guaranty agency a percentage of the outstanding principal and interest that is equal to the complement of the reinsurance percentage paid on the loan. This interest includes interest that accrues during—
(i) For death or bankruptcy claims, the shorter of 60 days or the period from the date the guaranty agency determines that the borrower (or the student for whom a parent obtained a PLUS loan, or each of the co-makers of a PLUS loan) dies, or filed a petition for relief in bankruptcy until the Secretary authorizes payment;
(ii) For disability claims, the shorter of 60 days or the period from the date the guaranty agency makes a preliminary determination that the borrower
(iii) For closed school or false certification claims, the period from the date on which the guaranty agency received payment from the Secretary on a default claim to the date on which the Secretary authorizes payment of the closed school or false certification claim.
(l)
(2)
(i) The borrower (or the student on whose behalf a parent borrowed) is not attending the school that owes the refund; and
(ii) The guarantor receives documentation regarding the refund and the borrower and guarantor have been unable to resolve the unpaid refund within 120 days from the date the guarantor receivesa complete application in accordance with paragraph (l)(4) of this section. Any accrued interest and other charges (late charges, collection costs, origination fees, and insurance premiums) associated with the amount of the unpaid refund amount are also discharged.
(3)
(ii) The holder of the loan reports the discharge of a portion of a loan under this section to all credit reporting agencies to which the holder of the loan previously reported the status of the loan.
(4)
(i) State that the borrower (or the student on whose behalf a parent borrowed)—
(A) Received the proceeds of a loan, in whole or in part, on or after January 1, 1986 to attend a school;
(B) Did not attend, withdrew, or was terminated from the school within a timeframe that entitled the borrower to a refund; and
(C) Did not receive the benefit of a refund to which the borrower was entitled either from the school or from a third party, such as a holder of a performance bond or a tuition recovery program.
(ii) State whether the borrower has any other application for discharge pending for this loan; and
(iii) State that the borrower—
(A) Agrees to provide upon request by the Secretary or the Secretary's designee other documentation reasonably available to the borrower that demonstrates that the borrower meets the qualifications for an unpaid refund discharge under this section; and
(B) Agrees to cooperate with the Secretary or the Secretary's designee in enforcement actions in accordance with paragraph (e) of this section and to transfer any right to recovery against a third party to the Secretary in accordance with paragraph (d) of this section.
(5)
(ii) If the borrower returns the application, specified in paragraph (l)(4) of this section, the holder or the guaranty agency must review the application to determine whether the application appears to be complete. In the case of a loan held by a lender, once the lender determines that the application appears complete, it must provide the application and all pertinent information to the guaranty agency including, if available, the borrower's last date of attendance. If the borrower returns the application within 60 days, the lender must extend the period during which efforts to collect on the affected loan are suspended to the date the lender receives either a denial of the request or the unpaid refund amount from the guaranty agency. At the conclusion of the period during which the collection activity was suspended, the lender may capitalize any interest accrued and not paid during that period in accordance with § 682.202(b).
(iii) If the borrower fails to return the application within 60 days, the holder of the loan resumes collection efforts and grants forbearance of principal and interest for the period during which the collection activity was suspended. The holder may capitalize any interest accrued and not paid during that period in accordance with § 682.202(b).
(iv) The guaranty agency may, with the approval of the Secretary, discharge a portion of a loan under this section without an application if the guaranty agency determines, based on information in the guaranty agency's possession, that the borrower qualifies for a discharge.
(v) If the holder of the loan or the guaranty agency determines that the information contained in its files conflicts with the information provided by the borrower, the guaranty agency must use the most reliable information available to it to determine eligibility for and the appropriate payment of the refund amount.
(vi) If the holder of the loan is the guaranty agency and the agency determines that the borrower qualifies for a discharge of an unpaid refund, the guaranty agency must suspend any efforts to collect on the affected loan and, within 30 days of its determination, discharge the appropriate amount and inform the borrower of its determination. Absent documentation of the exact amount of refund due the borrower, the guaranty agency must calculate the amount of the unpaid refund using the unpaid refund calculation defined in paragraph (o) of this section.
(vii) If the guaranty agency determines that a borrower does not qualify for an unpaid refund discharge, (or, if the holder is the lender and is informed by the guarantor that the borrower does not qualify for a discharge)—
(A) Within 30 days of the guarantor's determination, the agency must notify the borrower in writing of the reason for the determination and of the borrower's right to request a review of the agency's determination. The guaranty agency must make a determination within 30 days of the borrower's submission of additional documentation supporting the borrower's eligibility that was not considered in any prior determination. During the review period, collection activities must be suspended; and
(B) The holder must resume collection if the determination remains unchanged and grant forbearance of principal and interest for any period during which collection activity was suspended under this section. The holder may capitalize any interest accrued
(viii) If the guaranty agency determines that a current or former borrower at an open school may be eligible for a discharge under this section, the guaranty agency must notify the lender and the school of the unpaid refund allegation. The notice to the school must include all pertinent facts available to the guaranty agency regarding the alleged unpaid refund. The school must, no later than 60 days after receiving the notice, provide the guaranty agency with documentation demonstrating, to the satisfaction of the guarantor, that the alleged unpaid refund was either paid or not required to be paid.
(ix) In the case of a school that does not make a refund or provide sufficient documentation demonstrating the refund was either paid or was not required, within 60 days of its receipt of the allegation notice from the guaranty agency, relief is provided to the borrower (and any endorser) if the guaranty agency determines the relief is appropriate. The agency must forward documentation of the school's failure to pay the unpaid refund to the Secretary.
(m)
(n)
(2)
(o)(1)
(2) If the information in paragraph (o)(1) of this section is not available, the guaranty agency uses the following formulas to determine the amount eligible for discharge:
(i) In the case of a student who fails to attend or whose withdrawal or termination date is before October 7, 2000 and who completes less than 60 percent of the loan period, the guaranty agency discharges the lesser of the institutional charges unearned or the loan amount. The guaranty agency determines the amount of the institutional charges unearned by—
(A) Calculating the ratio of the amount of time in the loan period after the student's last day of attendance to the actual length of the loan period; and
(B) Multiplying the resulting factor by the institutional charges assessed the student for the loan period.
(ii) In the case of a student who fails to attend or whose withdrawal or termination date is on or after October 7, 2000 and who completes less than 60 percent of the loan period, the guaranty agency discharges the loan amount unearned. The guaranty agency determines the loan amount unearned by—
(A) Calculating the ratio of the amount of time remaining in the loan period after the student's last day of attendance to the actual length of the loan period; and
(B) Multiplying the resulting factor by the total amount of title IV grants and loans received by the student, or if unknown, the loan amount.
(iii) In the case of a student who completes 60 percent or more of the loan period, the guaranty agency does not discharge any amount because a
(p)
(q)
(2) If the holder has returned a payment to the borrower, or the borrower's representative, with the notice described in paragraph (q)(1) of this section, and the borrower (or representative) continues to send payments to the holder, the holder must remit all of those payments to the Secretary.
(3) If the loan has not been fully discharged, payments must be applied to the remaining debt.
(r)
(1) If the guaranty agency receives any payments from or on behalf of the borrower on or attributable to a loan that as been discharged in bankruptcy on which the Secretary previously paid a bankruptcy claim, the guaranty agency must return 100 percent of these payments to the sender. The guaranty agency must promptly return, to the sender, any payment on a cancelled or discharged loan made by the sender and received after the Secretary pays a closed school or false certification claim. At the same time that the agency returns the payment, it must notify the borrower that there is no obligation to repay a loan discharged on the basis of death, bankruptcy, false certification, or closing of the school.
(2) If the guaranty agency receives any payments from or on behalf of the borrower on or attributable to a loan that has been assigned to the Secretary for determination of eligibility for a total and permanent disability discharge, the guaranty agency must forward those payments to the Secretary for crediting to the borrower's account. At the same time that the agency forwards the payments, it must notify the borrower that there is no obligation to make payments on the loan while it is conditionally discharged prior to a final determination of eligibility for a total and permanent disability discharge, unless the Secretary directs the borrower otherwise.
(3) When the Secretary makes a final determination to discharge the loan, the Secretary returns to the sender any payments received on the loan after the date the borrower became totally and permanently disabled.
(4) The guaranty agency shall remit to the Secretary all payments received from a tuition recovery fund, performance bond, or other third party with respect to a loan on which the Secretary previously paid a closed school or false certification claim.
(5) If the guaranty agency has returned a payment to the borrower, or the borrower's representative, with the notice described in paragraphs (r)(1) or (r)(2) of this section, and the borrower (or representative) continues to send payments to the guaranty agency, the agency must remit all of those payments to the Secretary.
(s)
(1) Includes any period during which the lender does not require the borrower to make a payment on the loan.
(2) Begins on the date on which the borrower qualifies for the requested deferment as provided in §682.210(a)(5) or the lender grants the requested forbearance;
(3) Closes on the later of the date on which—
(i) The condition for which the requested deferment or forbearance was received ends; or
(ii) The lender receives notice of the end of the condition for which the requested deferment or forbearance was received, if the condition ended earlier than represented by the borrower at the time of the request and the borrower did not notify timely the lender of the date on which the condition actually ended;
(4) Includes the period between the end of the borrower's grace period and the first payment due date established by the lender in the case of a borrower who entered repayment without the knowledge of the lender;
(5) Includes the period between the filing of the petition for relief and the date on which the proceeding is completed or dismissed, unless payments have been made during that period in amounts sufficient to meet the amount owed under the repayment schedule in effect when the petition was filed.
(a) The Secretary makes an advance to a guaranty agency that has a reinsurance agreement. The advance may be used only to pay guarantee claims. The Secretary makes an advance to—
(1) A State guaranty agency; or
(2) 1 or more private nonprofit guarantee agencies in a State if, during a fiscal year—
(i) The State does not have a guaranty agency program;
(ii) The Secretary consults the chief executive officer of the State and finds it unlikely that the State will have a program for that year; and
(iii) Each private nonprofit guaranty agency—
(A) Agrees to establish at least 1 office in the State with sufficient staff to handle written and telephone inquiries from students, eligible lenders, and other persons in the State;
(B) Agrees to encourage maximum commercial lender participation within the State and to conduct periodic visits to at least the major lenders within the State;
(C) Agrees that the benefit of its loan guarantees will not be denied to students because of their choice of schools or lack of need; and
(D) Certifies that it is not an institution of higher education and that it does not have any substantial affiliation with an institution of higher education.
(b) A guaranty agency shall apply to the Secretary in order to receive an initial advance.
(c)(1) An advance may be made to a new guaranty agency for each of five consecutive calendar years. A new agency is an agency that entered into a basic agreement on or after October 12, 1976, or that was not actively carrying on a loan guarantee program on or before October 12, 1976.
(2)(i) A guaranty agency may request that the initial advance be made on a specified date. The Secretary pays subsequent advances on the same day that the initial advance was made for each of the four succeeding calendar years.
(ii) An additional advance may be made to a private nonprofit guaranty agency only if the agency continues to qualify under paragraph (a) of this section.
(d) The Secretary makes an advance to a guaranty agency—
(1) On terms and conditions specified in an agreement between the Secretary and the guaranty agency;
(2) To ensure that the agency will fulfill its lender-of-last resort obligation; and
(3) To meet the agency's immediate cash needs and to ensure the uninterrupted payment of claims when the Secretary has terminated the agency's agreement and assumed its functions.
(e) In the case of a private nonprofit guaranty agency, the repayment of advances is determined separately for each State for which the agency has received in advance under this section, in
(f) A guaranty agency shall return advances provided under this section in accordance with the provisions of section 422 of the Act.
(a)
(i) 95 percent of its losses on default claim payments to lenders on loans for which the first disbursement is made on or after October 1, 1998;
(ii) 98 percent of its losses on default claim payments to lenders for loans for which the first disbursement is made on or after October 1, 1993, and before October 1, 1998; or
(iii) 100 percent of its losses on default claim payments to lenders—
(A) For loans for which the first disbursement is made prior to October 1, 1993;
(B) For loans made under an approved lender-of-last-resort program;
(C) For loans transferred under a plan approved by the Secretary from an insolvent guaranty agency or a guaranty agency that withdraws its participation in the FFEL Program;
(D) For a guaranty agency that entered into a basic program agreement under section 428(b) of the Act after September 30, 1976, or was not actively carrying on a loan guarantee program covered by a basic program agreement on October 1, 1976 for five consecutive fiscal years beginning with the first year of its operation.
(2) For purposes of this section—
(i)
(ii)
(3) A guaranty agency's loss on a loan that was outstanding when a reinsurance agreement was executed is covered by the reinsurance agreement only if the default on the loan occurs after the effective date of the agreement.
(4) If a lender has requested default aversion assistance as described in paragraph (a)(2)(ii) of this section, the agency must, upon request of the school at which the borrower received the loan, notify the school of the lender's request. The guaranty agency may not charge the school or the school's agent for providing this notification and must accept a blanket request from the school to be notified whenever any of the school's current or former students are the subject of a default aversion assistance request. The agency must notify schools annually of the option to make this blanket request.
(b)
(i) 90 percent of its losses on default claim payments to lenders on loans for which the first disbursement is made before October 1, 1993 or transferred under a plan approved by the Secretary from an insolvent guaranty agency or a guaranty agency that withdraws its participation in the FFEL Program;
(ii) 88 percent of its losses on default claim payments to lenders on loans for which the first disbursement is made on or after October 1, 1993, and before October 1, 1998; or
(iii) 85 percent of its losses on default claim payments to lenders on loans for which the first disbursement is made on or after October 1, 1998.
(2) If the total of reinsurance claims paid by the Secretary to a guaranty
(i) 80 percent of its losses on default claim payments to lenders on loans for which the first disbursement is made before October 1, 1993 or transferred under a plan approved by the Secretary from an insolvent guaranty agency or a guaranty agency that withdraws its participation in the FFEL Program;
(ii) 78 percent of its losses on default claim payments to lenders on loans for which the first disbursement is made on or after October 1, 1993, and before October 1, 1998; or
(iii) 75 percent of its losses on default claim payments to lenders on loans for which the first disbursement is made on or after October 1, 1998.
(3) For purposes of this section, the total of reinsurance claims paid by the Secretary to a guaranty agency during any fiscal year does not include amounts paid on claims by the guaranty agency—
(i) On loans considered in default under § 682.412(e);
(ii) Under a policy established by the agency that is consistent with § 682.509(a)(1); or
(iii) That were filed by lenders at the direction of the Secretary;
(iv) On loans made under a guaranty agency's approved lender-of-last-resort program.
(4) For purposes of this section,
(i) The sum of—
(A) The original principal amount of all loans guaranteed by the agency; and
(B) The original principal amount of any loans on which the guarantee was transferred to the agency from another agency;
(ii) Minus the original principal amount of all loans on which—
(A) The loan guarantee was canceled;
(B) The loan guarantee was transferred to another agency;
(C) The borrower has not yet reached the repayment period;
(D) Payment in full has been made by the borrower;
(E) The borrower was in deferment status at the time repayment was scheduled to begin and remains in deferment status;
(F) Reinsurance coverage has been lost and cannot be regained; and
(G) The agency paid claims, excluding the amount of those claims—
(
(
(
(c)
(d)
(i) 0.25 percent of the total principal amount of the Stafford, SLS, and PLUS loans on which guarantees were issued by that agency during that fiscal year; or
(ii) 0.5 percent of the total principal amount of the Stafford, SLS, and PLUS loans on which guarantees were issued by that agency during that fiscal year if the agency's reinsurance claims paid reach the amount described in paragraph (b)(1) of this section at any time during that fiscal year.
(2) The agency that is the original guarantor of a loan shall pay the reinsurance fee to the Secretary even if the guaranty agency transfers its guarantee obligation on the loan to another guaranty agency.
(3) The guaranty agency shall pay the reinsurance fee required by paragraph (d)(1) of this section due the Secretary for each calendar quarter ending
(e)
(1) Efforts by the guaranty agency and the lenders to which it provides guarantees to collect outstanding loans as required by § 682.410(b) (6) or (7), and § 682.411;
(2) Efforts by the guaranty agency to make FFEL loans available to all eligible borrowers; and
(3) Other relevant aspects of the guaranty agency's program operations.
(f)
(g)
(i) The agency deposits into the Federal Fund the amount of those payments equal to the applicable complement of the reinsurance percentage that was in effect at the time the claim was paid; and
(ii) The agency has deducted an amount equal to—
(A) 30 percent of borrower payments received before October 1, 1993;
(B) 27 percent of borrower payments received on or after October 1, 1993, and before October 1, 1998;
(C) 24 percent of borrower payments received on or after October 1, 1998, and before October 1, 2003; and
(D) 23 percent of borrower payments received on or after October 1, 2003.
(2) Unless the Secretary approves otherwise, the guaranty agency must pay to the Secretary the Secretary's share of borrower payments within 45 days of its receipt of the payments.
(h)
(2) For purposes of this section a guaranty agency is deemed to be serving a State if it guarantees a loan that is—
(i) Made by a lender located in a State not served by the agency;
(ii) Made to a borrower who is a resident of a State not served by the agency; and
(iii) Made for attendance at a school located in the State.
(i)
(j)
(k)
(2)
(i) One percent of the unpaid principal and accrued interest owed on loans that were submitted by lenders to the agency for default aversion assistance; minus
(ii) One percent of the unpaid principal and accrued interest owed by borrowers on default claims that—
(A) Were paid by the agency for the same time period for which the agency transferred default aversion fees from its Federal Fund; and
(B) For which default aversion fees have been received by the agency.
(3)
(ii) For purposes of paragraph (k)(2)(ii) of this section, the agency must use the total unpaid principal and accrued interest owed by the borrower as of the date the agency paid the default claim.
(4)
(i) Hold or service the loan; or
(ii) Perform collection activities on the loan in the event of default within 3 years of the claim payment date.
(l)
(1) Promote the purposes of the FFEL programs and to protect the United States from unreasonable risks of loss;
(2) Ensure proper and efficient administration of the loan guarantee program; and
(3) Ensure that due diligence will be exercised in the collection of loans.
(a)
(2) A loan is considered to be rehabilitated only after the borrower has made one voluntary reasonable and affordable full payment each month and the payment is received by a guaranty agency or its agent within 15 days of the scheduled due date for 12 consecutive months in accordance with this section, and the loan has been sold to an eligible lender.
(3) After the loan has been rehabilitated, the borrower regains all benefits of the program, including any remaining deferment eligibility under section 428(b)(1)(M) of the Act, from the date of the rehabilitation.
(b)
(1) A borrower may request the rehabilitation of the borrower's defaulted FFEL loan held by the guaranty agency. The borrower must make one on-time voluntary full payment each month for 12 consecutive months to be
(i) For purposes of this section, the determination of reasonable and affordable must—
(A) Include a consideration of the borrower's and spouse's disposable income and reasonable and necessary expenses including, but not limited to, housing, utilities, food, medical costs, work-related expenses, dependent care costs and other Title IV repayment;
(B) Not be a required minimum payment amount, e.g. $50, if the agency determines that a smaller amount is reasonable and affordable based on the borrower's total financial circumstances. The agency must include documentation in the borrower's file of the basis for the determination if the monthly reasonable and affordable payment established under this section is less than $50.00 or the monthly accrued interest on the loan, whichever is greater. However, $50.00 may not be the minimum payment for a borrower if the agency determines that a smaller amount is reasonable and affordable; and
(C) Be based on the documentation provided by the borrower or other sources including, but not be limited to—
(
(
(
(ii) The agency must include any payment made under § 682.401(b)(4) in determining whether the 12 consecutive payments required under paragraph (b)(1) of this section have been made.
(iii) A borrower may request that the monthly payment amount be adjusted due to a change in the borrower's total financial circumstances only upon providing the documentation specified in paragraph (b)(1)(i)(C) of this section.
(iv) A guaranty agency must provide the borrower with a written statement confirming the borrower's reasonable and affordable payment amount, as determined by the agency, and explaining any other terms and conditions applicable to the required series of payments that must be made before a borrower's account can be considered for repurchase by an eligible lender. The statement must inform borrowers of the effects of having their loans rehabilitated (e.g. credit clearing, possibility of increased monthly payments). The statement must inform the borrower of the amount of the collection costs to be added to the unpaid principal at the time of the sale. The collection costs may not exceed 18.5 percent of the unpaid principal and accrued interest at the time of the sale.
(v) A guaranty agency must provide the borrower with an opportunity to object to terms of the rehabilitation of the borrower's defaulted loan.
(2) The guaranty agency must report to all national credit bureaus within 90 days of the date the loan was rehabilitated that the loan is no longer in a default status and that the default is to be removed from the borrower's credit history.
(3) An eligible lender purchasing a rehabilitated loan must establish a repayment schedule that meets the same requirements that are applicable to other FFEL Program loans made under the same loan type and provides for the borrower to make monthly payments at least as great as the average of the 12 consecutive monthly payments received by the guaranty agency. For the
(a) A guaranty agency may make a claim payment from the Federal Fund and receive a reinsurance payment on a loan only if—
(1) The lender exercised due diligence in making, disbursing, and servicing the loan as prescribed by the rules of the agency;
(2) With respect to the reinsurance payment on the portion of a loan represented by a single disbursement of loan proceeds—
(i) The check for the disbursement was cashed within 120 days after disbursement; or
(ii) The proceeds of the disbursement made by electronic funds transfer or master check in accordance with § 682.207(b)(1)(ii) (B) and (C) have been released from the restricted account maintained by the school within 120 days after disbursement;
(3) The lender provided an accurate collection history and an accurate payment history to the guaranty agency with the default claim filed on the loan showing that the lender exercised due diligence in collecting the loan through collection efforts meeting the requirements of § 682.411, including collection efforts against each endorser;
(4) The loan was in default before the agency paid a default claim filed thereon;
(5) The lender filed a default claim thereon with the guaranty agency within 90 days of default;
(6) The lender resubmitted a properly documented default claim to the guaranty agency not later than 60 days from the date the agency had returned that claim due solely to inadequate documentation, except that interest accruing beyond the 30th day after the date the guaranty agency returned the claim is not reinsured unless the lender files a claim for loss on the loan with the guarantor together with all required documentation, prior to the 30th day;
(7) The lender satisfied all conditions of guarantee coverage set by the agency, unless the agency reinstated guarantee coverage on the loan following the lender's failure to satisfy such a condition pursuant to written policies and procedures established by the agency;
(8) The agency paid or returned to the lender for additional documentation a default claim thereon filed by the lender within 90 days of the date the lender filed the claim or, if applicable, the additional documentation, except that interest accruing beyond the 60th day after the date the lender originally filed the claim is not reinsured;
(9) The agency submitted a request for the payment on a form required by the Secretary no later than 45 days following payment of a default claim to the lender;
(10) The loan was legally enforceable by the lender when the agency paid a claim on the loan to the lender;
(11) The agency exercised due diligence in collection of the loan in accordance with § 682.410(b)(6);
(12) The agency and lender, if applicable, complied with all other Federal requirements with respect to the loan including—
(i) Payment of origination fees;
(ii) For Consolidation loans disbursed on or after October 1, 1993, and prior to October 1, 1998, payment on a monthly basis, of an interest payment rebate fee calculated on an annual basis and equal to 1.05 percent of the unpaid principal and accrued interest on the loan;
(iii) For Consolidation loans for which the application was received by the lender on or after October 1, 1998 and prior to February 1, 1999, payment on a monthly basis, of an interest payment rebate fee calculated on an annual basis and equal to 0.62 percent of the unpaid principal and accrued interest on the loan;
(iv) For Consolidation loans disbursed on or after February 1, 1999, payment of an interest payment rebate fee in accordance with paragraph (a)(12)(ii) of this section; and
(v) Compliance with all default aversion assistance requirements in § 682.404(a)(2)(ii).
(13) The agency assigns the loan to the Secretary, if so directed, in accordance with the requirements of § 682.409; and
(14) The guaranty agency certifies to the Secretary that diligent attempts have been made by the lender and the guaranty agency under § 682.411(h) to locate the borrower through the use of effective skip-tracing techniques, including contact with the schools the student attended.
(b) Notwithstanding paragraph (a) of this section, the Secretary may waive his right to refuse to make or require repayment of a reinsurance payment if, in the Secretary's judgment, the best interests of the United States so require. The Secretary's waiver policy for violations of paragraph (a)(3) or (a)(5) of this section is set forth in appendix D to this part.
(c) In evaluating a claim for insurance or reinsurance, the issue of confirmation of subsequent loans under an MPN will not be reviewed and a claim will not be denied based on the absence of any evidence relating to confirmation in a particular loan file. However, if a court rules that a loan is unenforceable solely because of the lack of evidence of a confirmation process or processes, insurance and reinsurance benefits must be repaid.
(a)
(2) The agreement must provide that—
(i) The lender may make payments into an escrow account that is administered by the escrow agent in accordance with the requirements of paragraph (c) of this section and § 682.207(b)(1)(iv);
(ii) The lender shall promptly notify the borrower's school when funds are escrowed for the borrower; and
(iii) The escrow agent is authorized to—
(A) Transmit the proceeds according to the note evidencing the loan;
(B) Commingle the proceeds of the loans paid to it pursuant to an escrow agreement;
(C) Invest the loan proceeds only in obligations of the Federal Government or obligations that are insured or guaranteed by the Federal Government; and
(D) Retain for its own use interest or other earnings on those investments.
(b)
(c)
(2) The escrow agent shall transmit PLUS loan proceeds received from a lender under this section to a borrower
(d)
(a)(1) If the Secretary determines that action is necessary to protect the Federal fiscal interest, the Secretary directs a guaranty agency to promptly assign to the Secretary any loans held by the agency on which the agency has received payment under § 682.402(f), 682.402(k), or 682.404. The collection of unpaid loans owed by Federal employees by Federal salary offset is, among other things, deemed to be in the Federal fiscal interest. Unless the Secretary notifies an agency, in writing, that other loans must be assigned to the Secretary, an agency must assign any loan that meets all of the following criteria as of April 15 of each year:
(i) The unpaid principal balance is at least $100.
(ii) For each of the two fiscal years following the fiscal year in which these regulations are effective, the loan, and any other loans held by the agency for that borrower, have been held by the agency for at least four years; for any subsequent fiscal year such loan must have been held by the agency for at least five years.
(iii) A payment has not been received on the loan in the last year.
(iv) A judgment has not been entered on the loan against the borrower.
(2) If the agency fails to meet a fiscal year recovery rate standard under paragraph (a)(2)(ii) of this section for a loan type, and the Secretary determines that additional assignments are necessary to protect the Federal fiscal interest, the Secretary may require the agency to assign in addition to those loans described in paragraph (a)(1) of this section, loans in amounts needed to satisfy the requirements of paragraph (a)(2)(iii) or (a)(3)(i) of this section.
(i)
(ii)
(B) In any subsequent fiscal year the loan type recovery rate standard for a loan program must be 90 percent of the average recovery rate of all active guaranty agencies.
(iii)
(A) Unless the Secretary determines under paragraph (a)(2)(iv) of this section that protection of the Federal fiscal interest requires that a lesser amount be assigned, upon notice from the Secretary, an agency with a fiscal year loan type recovery rate described
(B) The Secretary, in consultation with the guaranty agency, may require the amount of loans to be assigned under paragraph (a)(2) of this section to include particular categories of loans that share characteristics that make the performance of the agency fall below the appropriate percentage of the loan type recovery rate as described in paragraph (a)(2)(ii) of this section.
(iv)
(3)(i)
(A) For each of the two fiscal years following the fiscal year in which these regulations are effective, the Secretary considers information presented by an agency with a fiscal year loan type recovery rate above the average rate of all active agencies to demonstrate that the protection of the Federal fiscal interest will be served if any amounts of loans of the loan type required to be assigned to the Secretary under paragraph (a)(1) of this section are retained by that agency. For any subsequent fiscal year, the Secretary considers information presented by an agency with a fiscal year recovery rate 10 percent above the average rate of all active agencies.
(B) The Secretary considers information presented by an agency that is required to assign loans under paragraph (a)(2) of this section to demonstrate that the protection of the Federal fiscal interest will be served if the agency demonstrates that its compliance with § 682.401(b)(4) and § 682.405 has reduced substantially its fiscal year loan type recovery rate or rates or if the agency is not required to assign amounts of loans that would otherwise have to be assigned.
(C) The information provided by an agency pursuant to paragraphs (a)(3)(i)(A) and (B) of this section may include, but is not limited to the following:
(
(
(
(
(
(
(
(ii)
(b)(1) A guaranty agency that assigns a defaulted loan to the Secretary under this section thereby releases all rights and title to that loan. The Secretary does not pay the guaranty agency any compensation for a loan assigned under this section.
(2) The guaranty agency does not share in any amounts received by the Secretary on a loan assigned under this section, regardless of the reinsurance percentage paid on the loan or the agency's previous collection costs.
(c)(1) A guaranty agency must assign a loan to the Secretary under this section at the time, in the manner, and with the information and documentation that the Secretary requires. The agency must submit this information and documentation in the form (including magnetic media) and format specified by the Secretary.
(2) The guaranty agency must execute an assignment to the United States of America of all right, title, and interest in the promissory note or judgment evidencing a loan assigned under this section. If more than one loan is made under an MPN, the assignment of the note only applies to the loan or loans being assigned to the Secretary.
(3) If the agency does not provide the required information and documentation in the form and format required by the Secretary, the Secretary may, at his option—
(i) Allow the agency to revise the agency's submission to include the required information and documentation in the specified form and format;
(ii) In the case of an improperly formatted computer tape, reformat the tape and assess the cost of the activity against the agency;
(iii) Reorganize the material submitted and assess the cost of that activity against the agency; or
(iv) Obtain from other agency records and add to the agency's submission any information from the original submission, and assess the cost of that activity against the agency.
(4) For each loan assigned, the agency shall submit to the Secretary the following documents associated for each loan, assembled in the order listed below:
(i) The original or a true and exact copy of the promissory note.
(ii) Any documentation of a judgment entered on the loan.
(iii) A written assignment of the loan or judgment, unless this assignment is affixed to the promissory note.
(iv) The loan application, if a separate application was provided to the lender.
(v) A payment history for the loan, as described in § 682.414(a)(1)(ii)(C).
(vi) A collection history for the loan, as described in § 682.414(a)(1)(ii)(D).
(5) The agency may submit copies of required documents in lieu of originals.
(6) The Secretary may accept the assignment of a loan without all of the documents listed in paragraph (c)(4) of this section. If directed to do so, the agency must retain these documents for submission to the Secretary at some future date.
(d)(1) If the Secretary determines that the agency has not submitted a document or record required by paragraph (c) of this section, and the Secretary decides to allow the agency an additional opportunity to submit the omitted document under paragraph (c)(3)(i) of this section, the Secretary notifies the agency and provides a reasonable period of time for the agency to submit the omitted record or document.
(2) If the omitted document is not submitted within the time specified by the Secretary, the Secretary determines whether that omission impairs the Secretary's ability to collect the loan.
(3) If the Secretary determines that the ability to collect the loan has been impaired under paragraph (d)(2) of this section, the Secretary assesses the agency the amount paid to the agency under the reinsurance agreement and accrued interest at the rate applicable to the borrower under § 682.410(b)(3).
(4) The Secretary reassigns to the agency that portion of the loan determined to be unenforceable by the Department.
(a)
(i) The total amount of insurance premiums collected;
(ii) Funds received from a State for the agency's guaranty activities, including matching funds under section 422(a) of the Act;
(iii) Federal advances obtained under sections 422(a) and (c) of the Act;
(iv) Federal payments for default, bankruptcy, death, disability, closed schools, and false certification claims;
(v) Supplemental preclaims assistance payments;
(vi) Transitional support payments received under section 458(a) of the Act;
(vii) Funds collected by the guaranty agency on FFEL Program loans on which a claim has been paid;
(viii) Investment earnings on the reserve fund; and
(ix) Other funds received by the guaranty agency from any source for the agency's guaranty activities.
(2)
(i) Insurance claims;
(ii) Costs that are reasonable, as defined under § 682.410(a)(11)(iii), and that are ordinary and necessary for the agency to fulfill its responsibilities under the HEA, including costs of collecting loans, providing preclaims assistance, monitoring enrollment and repayment status, and carrying out any other guaranty activities. Those costs must be—
(A) Allocable to the FFEL Program;
(B) Not higher than the agency would incur under established policies, regulations, and procedures that apply to any comparable non-Federal activities of the guaranty agency;
(C) Not included as a cost or used to meet cost sharing or matching requirements of any other federally supported activity, except as specifically provided by Federal law;
(D) Net of all applicable credits; and
(E) Documented in accordance with applicable legal and accounting standards;
(iii) The Secretary's equitable share of collections;
(iv) Federal advances and other funds owed to the Secretary;
(v) Reinsurance fees;
(vi) Insurance premiums related to cancelled loans;
(vii) Borrower refunds, including those arising out of student or other borrower claims and defenses;
(viii) (A) The repayment, on or after December 29, 1993, of amounts credited under paragraphs (a)(1)(ii) or (a)(1)(ix) of this section, if the agency provides the Secretary 30 days prior notice of the repayment and demonstrates that—
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(B) The repayment, prior to December 29, 1993, of amounts credited under paragraphs (a)(1)(ii) or (a)(1)(ix) of this
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(ix) Any other costs or payments ordinary and necessary to perform functions directly related to the agency's responsibilities under the HEA and for their proper and efficient administration;
(x) Notwithstanding any other provision of this section, any other payment that was allowed by law or regulation at the time it was made, if the agency acted in good faith when it made the payment or the agency would otherwise be unfairly prejudiced by the nonallowability of the payment at a later time; and
(xi) Any other amounts authorized or directed by the Secretary.
(3)
(4)
(ii) A guaranty agency may reverse prior credits to its reserve fund if—
(A) The agency gives the Secretary prior notice setting forth a detailed justification for the action;
(B) The Secretary determines that such credits were made erroneously and in good faith; and
(C) The Secretary determines that the action would not unfairly prejudice other parties.
(iii) A guaranty agency shall correct any other errors in its accounting or reporting as soon as practicable after the errors become known to the agency.
(iv) If a general reconstruction of a guaranty agency's historical accounting records is necessary to make a change under paragraphs (a)(4)(ii) and (a)(4)(iii) of this section or any other retroactive change to its accounting records, the agency may make this reconstruction only upon prior approval by the Secretary and without any deduction from its reserve fund for the cost of the reconstruction.
(5)
(6)
(A) Correct this allocation under paragraph (a)(4)(iii) of this section; or
(B) Correct the recorded ownership of the asset under paragraph (a)(4)(iii) of this section so that—
(
(
(ii) If the agency uses funds or assets described in paragraph (a)(6)(i) of this section in the manner described in that paragraph and makes a cost and maintenance allocation erroneously and in good faith, it shall correct the allocation under paragraph (a)(4)(iii) of this section.
(7)
(8)
(9)
(10)
(i) .5 percent of the amount of loans outstanding, for the fiscal year of the agency that begins in calendar year 1993;
(ii) .7 percent of the amount of loans outstanding, for the fiscal year of the agency that begins in calendar year 1994;
(iii) .9 percent of the amount of loans outstanding, for the fiscal year of the agency that begins in calendar year 1995; and
(iv) 1.1 percent of the amount of loans outstanding, for each fiscal year of the agency that begins on or after January 1, 1996.
(11)
(i)
(A) The total of reserve fund assets as defined in paragraph (a)(1) of this section;
(B) Minus the total amount of the reserve fund assets used in accordance with paragraphs (a)(2) and (a)(3) of this section; and
(ii)
(A) The sum of—
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(B) Minus the original principal amount of all loans on which—
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(iii)
(A) Whether the cost is of a type generally recognized as ordinary and necessary for the proper and efficient performance and administration of the guaranty agency's responsibilities under the HEA;
(B) The restraints or requirements imposed by factors such as sound business practices, arms-length bargaining, Federal, State, and other laws and regulations, and the terms and conditions of the guaranty agency's agreements with the Secretary; and
(C) Market prices of comparable goods or services.
(b)
(i) With regard to a guaranty agency that is an agency of a State government, an audit must be conducted in accordance with 31 U.S.C. 7502 and 34 CFR part 80, appendix G.
(ii) With regard to a guaranty agency that is a nonprofit organization, an audit must be conducted in accordance with OMB Circular A-133, Audits of Institutions of Higher Education and Other Nonprofit Organizations and 34 CFR 74.61(h)(3). If a nonprofit guaranty agency meets the criteria in Circular A-133 to have a program specific audit, and chooses that option, the program specific audit must meet the following requirements:
(A) The audit must examine the agency's compliance with the Act, applicable regulations, and agreements entered into under this part.
(B) The audit must examine the agency's financial management of its FFEL program activities.
(C) The audit must be conducted in accordance with the standards for audits issued by the United States General Accounting Office's (GAO) Government Auditing Standards. Procedures for audits are contained in an audit guide developed by, and available from, the Office of the Inspector General of the Department.
(D) The audit must be conducted annually and must be submitted to the Secretary within six months of the end of the audit period. The first audit must cover the agency's activities for a period that includes July 23, 1992, unless the agency is currently submitting audits on a biennial basis, and the second year of its biennial cycle starts on or before July 23, 1992. Under these circumstances, the agency shall submit a biennial audit that includes July 23, 1992 and submit its next audit as an annual audit.
(2)
(i) The amount the same borrower would be charged for the cost of collection under the formula in 34 CFR 30.60; or
(ii) The amount the same borrower would be charged for the cost of collection if the loan was held by the U.S. Department of Education.
(3)
(i) The rate established by the terms of the borrower's original promissory note;
(ii) In the case of a loan for which a judgment has been obtained, the rate provided for by State law.
(4)
(5)
(A) The total amount of loans made to the borrower and the remaining balance of those loans;
(B) The date of default;
(C) Information concerning collection of the loan, including the repayment status of the loan;
(D) Any changes or corrections in the information reported by the agency that result from information received after the initial report; and
(E) The date the loan is fully repaid by or on behalf of the borrower or discharged by reason of the borrower's death, bankruptcy, total and permanent disability, or closed school or false certification.
(ii) The guaranty agency, after it pays a default claim on a loan but before it reports the default to a credit bureau or assesses collection costs against a borrower, shall, within the timeframe specified in paragraph (b)(6)(v) of this section, provide the borrower with—
(A) Written notice that meets the requirements of paragraph (b)(5)(vi) of this section regarding the proposed actions;
(B) An opportunity to inspect and copy agency records pertaining to the loan obligation;
(C) An opportunity for an administrative review of the legal enforceability or past-due status of the loan obligation; and
(D) An opportunity to enter into a repayment agreement on terms satisfactory to the agency.
(iii) The procedures set forth in 34 CFR 30.20-30.33 (administrative offset) satisfy the requirements of paragraph (b)(5)(ii) of this section.
(iv)(A) In response to a request submitted by a borrower, after the deadlines established under agency rules, for access to records, an administrative review, or for an opportunity to enter into a repayment agreement, the agency shall provide the requested relief but may continue reporting the debt to credit bureaus until it determines that the borrower has demonstrated that the loan obligation is not legally enforceable or that alternative repayment arrangements satisfactory to the agency have been made with the borrower.
(B) The deadline established by the agency for requesting administrative review under paragraph (b)(5)(ii)(C) of this section must allow the borrower at least 60 days from the date the notice described in paragraph (b)(5)(ii)(A) of this section is sent to request that review.
(v) An agency may not permit an employee, official, or agent to conduct the administrative review required under this paragraph if that individual is—
(A) Employed in an organizational component of the agency or its agent that is charged with collection of loan obligations; or
(B) Compensated on the basis of collections on loan obligations.
(vi) The notice sent by the agency under paragraph (b)(5)(ii)(A) of this section must—
(A) Advise the borrower that the agency has paid a default claim filed by the lender and has taken assignment of the loan;
(B) Identify the lender that made the loan and the school for attendance at which the loan was made;
(C) State the outstanding principal, accrued interest, and any other charges then owing on the loan;
(D) Demand that the borrower immediately begin repayment of the loan;
(E) Explain the rate of interest that will accrue on the loan, that all costs incurred to collect the loan will be charged to the borrower, the authority for assessing these costs, and the manner in which the agency will calculate the amount of these costs;
(F) Notify the borrower that the agency will report the default to all national credit bureaus to the detriment of the borrower's credit rating;
(G) Explain the opportunities available to the borrower under agency rules to request access to the agency's records on the loan, to request an administrative review of the legal enforceability or past-due status of the loan, and to reach an agreement on repayment terms satisfactory to the agency to prevent the agency from reporting the loan as defaulted to credit bureaus and provide deadlines and method for requesting this relief;
(H) Unless the agency uses a separate notice to advise the borrower regarding other proposed enforcement actions, describe specifically any other enforcement action, such as offset against Federal or state income tax refunds or wage garnishment that the agency intends to use to collect the debt, and explain the procedures available to the borrower prior to those other enforcement actions for access to records, for an administrative review, or for agreement to alternative repayment terms;
(I) Describe the grounds on which the borrower may object that the loan obligation as stated in the notice is not a legally enforceable debt owed by the borrower;
(J) Describe any appeal rights available to the borrower from an adverse decision on administrative review of the loan obligation;
(K) Describe any right to judicial review of an adverse decision by the agency regarding the legal enforceability or past-due status of the loan obligation; and
(L) Describe the collection actions that the agency may take in the future if those presently proposed do not result in repayment of the loan obligation, including the filing of a lawsuit against the borrower by the agency and assignment of the loan to the Secretary for the filing of a lawsuit against the borrower by the Federal Government.
(vii) As part of the guaranty agency's response to a borrower who appeals an adverse decision resulting from the agency's administrative review of the loan obligation, the agency must provide the borrower with information on the availability of the Student Loan Ombudsman's office.
(6)
(ii) A guaranty agency must attempt an annual Federal offset against all eligible borrowers. If an agency initiates proceedings to offset a borrower's State or Federal income tax refunds and other payments made by the Federal Government to the borrower, it may not initiate those proceedings sooner than 60 days after sending the notice described in paragraph (b)(5)(ii)(A) of this section.
(iii) A guaranty agency must initiate administrative wage garnishment proceedings against all eligible borrowers, except as provided in paragraph (b)(6)(iv) of this section, by following the procedures described in paragraph (b)(9) of this section.
(iv) A guaranty agency may file a civil suit against a borrower to compel repayment only if the borrower has no wages that can be garnished under paragraph (b)(9) of this section, or the agency determines that the borrower has sufficient attachable assets or income that is not subject to administrative wage garnishment that can be used to repay the debt, and the use of litigation would be more effective in collection of the debt.
(v) Within 45 days after paying a lender's default claim, the agency must send a notice to the borrower that contains the information described in paragraph (b)(5)(ii) of this section. During this time period, the agency also must notify the borrower, either in the notice containing the information described in paragraph (b)(5)(ii) of this section, or in a separate notice, that if he or she does not make repayment arrangements acceptable to the agency, the agency will promptly initiate procedures to collect the debt. The agency's notification to the borrower must state that the agency may administratively garnish the borrower's wages, file a civil suit to compel repayment, offset the borrower's State and Federal income tax refunds and other payments made by the Federal Government to the borrower, assign the loan to the Secretary in accordance with § 682.409, and take other lawful collection means to collect the debt, at the discretion of the agency. The agency's notification must include a statement that borrowers may have certain legal rights in the collection of debts, and that borrowers may wish to contact counselors or lawyers regarding those rights.
(vi) Within a reasonable time after all of the information described in paragraph (b)(6)(v) of this section has been sent, the agency must send at least one notice informing the borrower that the default has been reported to all national credit bureaus (if that is the case) and that the borrower's credit rating may thereby have been damaged.
(7)
(ii) Upon the payment of a claim under a policy described in paragraph (b)(7)(i) of this section, the guaranty agency shall—
(A) Perform the loan servicing functions required of a lender under § 682.208, except that the agency is not required to follow the credit bureau reporting requirements of that section;
(B) Perform the functions of the lender during the repayment period of the loan, as required under § 682.209;
(C) If the borrower is delinquent in repaying the loan at the time the agency pays a claim thereon to the lender or becomes delinquent while the agency holds the loan, exercise due diligence in accordance with § 682.411 in attempting to collect the loan from the borrower and any endorser or co-maker; and
(D) After the date of default on the loan, if any, comply with paragraph (b)(6) of this section with respect to collection activities on the loan, with the date of default treated as the claim payment date for purposes of those paragraphs.
(8)
(9)
(A) The employer shall deduct and pay to the agency from a borrower's wages an amount that does not exceed the lesser of 10 percent of the borrower's disposable pay for each pay period or the amount permitted by 15 U.S.C. 1673, unless the borrower provides the agency with written consent to deduct a greater amount. For this purpose, the term “disposable pay” means that part of the borrower's compensation from an employer remaining after the deduction of any amounts required by law to be withheld.
(B) At least 30 days before the initiation of garnishment proceedings, the guaranty agency shall mail to the borrower's last known address, a written notice of the nature and amount of the debt, the intention of the agency to initiate proceedings to collect the debt through deductions from pay, and an explanation of the borrower's rights.
(C) The guaranty agency shall offer the borrower an opportunity to inspect and copy agency records related to the debt.
(D) The guaranty agency shall offer the borrower an opportunity to enter into a written repayment agreement with the agency under terms agreeable to the agency.
(E) The guaranty agency shall offer the borrower an opportunity for a hearing in accordance with paragraph (b)(9)(i)(J) of this section concerning the existence or the amount of the debt and, in the case of a borrower whose proposed repayment schedule under the garnishment order is established other than by a written agreement under paragraph (b)(9)(i)(D) of this section, the terms of the repayment schedule.
(F) The guaranty agency shall sue any employer for any amount that the employer, after receipt of the garnishment notice provided by the agency under paragraph (b)(9)(i)(H) of this section, fails to withhold from wages owed and payable to an employee under the employer's normal pay and disbursement cycle.
(G) The guaranty agency may not garnish the wages of a borrower whom it knows has been involuntarily separated from employment until the borrower has been reemployed continuously for at least 12 months.
(H) Unless the guaranty agency receives information that the agency believes justifies a delay or cancellation of the withholding order, it shall send a withholding order to the employer within 20 days after the borrower fails to make a timely request for a hearing, or, if a timely request for a hearing is made by the borrower, within 20 days after a final decision is made by the agency to proceed with garnishment.
(I) The notice given to the employer under paragraph (b)(9)(i)(H) of this section must contain only the information
(J) The guaranty agency shall provide a hearing, which, at the borrower's option, may be oral or written, if the borrower submits a written request for a hearing on the existence or amount of the debt or the terms of the repayment schedule. The time and location of the hearing shall be established by the agency. An oral hearing may, at the borrower's option, be conducted either in-person or by telephone conference. All telephonic charges must be the responsibility of the guaranty agency.
(K) If the borrower's written request is received by the guaranty agency on or before the 15th day following the borrower's receipt of the notice described in paragraph (b)(9)(i)(B) of this section, the guaranty agency may not issue a withholding order until the borrower has been provided the requested hearing. For purposes of this paragraph, in the absence of evidence to the contrary, a borrower shall be considered to have received the notice described in paragraph (b)(9)(i)(B) of this section 5 days after it was mailed by the agency. The guaranty agency shall provide a hearing to the borrower in sufficient time to permit a decision, in accordance with the procedures that the agency may prescribe, to be rendered within 60 days.
(L) If the borrower's written request is received by the guaranty agency after the 15th day following the borrower's receipt of the notice described in paragraph (b)(9)(i)(B) of this section, the guaranty agency shall provide a hearing to the borrower in sufficient time that a decision, in accordance with the procedures that the agency may prescribe, may be rendered within 60 days, but may not delay issuance of a withholding order unless the agency determines that the delay in filing the request was caused by factors over which the borrower had no control, or the agency receives information that the agency believes justifies a delay or cancellation of the withholding order. For purposes of this paragraph, in the absence of evidence to the contrary, a borrower shall be considered to have received the notice described in paragraph (b)(9)(i)(B) of this section 5 days after it was mailed by the agency.
(M) The hearing official appointed by the agency to conduct the hearing may be any qualified individual, including an administrative law judge, not under the supervision or control of the head of the guaranty agency.
(N) The hearing official shall issue a final written decision at the earliest practicable date, but not later than 60 days after the guaranty agency's receipt of the borrower's hearing request.
(O) As specified in section 488A(a)(8) of the HEA, the borrower may seek judicial relief, including punitive damages, if the employer discharges, refuses to employ, or takes disciplinary action against the borrower due to the issuance of a withholding order.
(ii) References to “the borrower” in this paragraph include all endorsers on a loan.
(10)
(A) Prohibit any employee, officer, director, trustee, or agent from participating in the selection, award, or decision-making related to the administration of a contract or agreement supported by the reserve fund described in paragraph (a) of this section, if that participation would create a conflict of interest. Such a conflict would arise if the employee, officer, director, trustee, or agent, or any member of his or her immediate family, his or her partner, or an organization that employs or is about to employ any of those parties has a financial or ownership interest in the organization selected for an award or would benefit from the decision made in the administration of the contract or agreement. The prohibitions
(B) Ensure sufficient separation of responsibility and authority between its lender claims processing as a guaranty agency and its lending or loan servicing activities, or both, within the guaranty agency or between that agency and one or more affiliates, including independence in direct reporting requirements and such management and systems controls as may be necessary to demonstrate, in the independent audit required under § 682.410(b)(1), that claims filed by another arm of the guaranty agency or by an affiliate of that agency receive no more favorable treatment than that accorded the claims filed by a lender or servicer that is not an affiliate or part of the guaranty agency; and
(C) Prohibit the employees, officers, directors, trustees, and agents of the guaranty agency, his or her partner, or any member of his or her immediate family, from soliciting or accepting gratuities, favors, or anything of monetary value from contractors or parties to agreements, except that nominal and unsolicited gratuities, favors, or items may be accepted.
(ii)
(c)
(1) Conducting comprehensive biennial on-site program reviews, using statistically valid techniques to calculate liabilities to the Secretary that each review indicates may exist, of at least—
(i)(A) Each participating lender whose dollar volume of FFEL loans made or held by the lender and guaranteed by the agency in the preceding year—
(
(
(
(B) Each lender described in section 435(d)(1)(D) or (J) of the Act that is located in any State in which the agency is the principal guarantor as defined in § 682.800(d), and, at the option of each guaranty agency, the Student Loan Marketing Association; and
(C) Each participating school, located in a State for which the guaranty agency is the principal guaranty agency, that has a cohort default rate, as described in subpart M of 34 CFR part 668, for either of the 2 immediately preceding fiscal years, as defined in 34 CFR 668.182, that exceeds 20 percent, unless the school is under a mandate from the Secretary under subpart M of 34 CFR part 668 to take specific default reduction measures or if the total dollar amount of loans entering repayment in each fiscal year on which the cohort default rate over 20 percent is based does not exceed $100,000; or
(ii) The schools and lenders selected by the agency as an alternative to the reviews required by paragraphs (c)(1)(A)-(C) of this section if the Secretary approves the agency's proposed alternative selection methodology.
(2) Demanding prompt repayment by the responsible parties to lenders, borrowers, the agency, or the Secretary, as appropriate, of all funds found in those reviews to be owed by the participants with regard to loans guaranteed by the agency, whether or not the agency holds the loans, and monitoring the implementation by participants of corrective actions, including these repayments, required by the agency as a result of those reviews.
(3) Referring to the Secretary for further enforcement action any case in
(4) Adopting procedures for identifying fraudulent loan applications.
(5) Undertaking or arranging with State or local law enforcement agencies for the prompt and thorough investigation of all allegations and indications of criminal or other programmatic misconduct by its program participants, including violations of Federal law or regulations.
(6) Promptly referring to appropriate State and local regulatory agencies and to nationally recognized accrediting agencies and associations for investigation information received by the guaranty agency that may affect the retention or renewal of the license or accreditation of a program participant.
(7) Promptly reporting all of the allegations and indications of misconduct having a substantial basis in fact, and the scope, progress, and results of the agency's investigations thereof to the Secretary.
(8) Referring appropriate cases to State or local authorities for criminal prosecution or civil litigation.
(9) Promptly notifying the Secretary of—
(i) Any action it takes affecting the FFEL program eligibility of a participating lender or school;
(ii) Information it receives regarding an action affecting the FFEL program eligibility of a participating lender or school taken by a nationally recognized accrediting agency, association, or a State licensing agency;
(iii) Any judicial or administrative proceeding relating to the enforceability of FFEL loans guaranteed by the agency or in which tuition obligations of a school's students are directly at issue, other than a proceeding relating to a single borrower or student; and
(iv) Any petition for relief in bankruptcy, application for receivership, or corporate dissolution proceeding brought by or against a school or lender participating in its loan guarantee program.
(10) Cooperating with all program reviews, investigations, and audits conducted by the Secretary relating to the agency's loan guarantee program.
(11) Taking prompt action to protect the rights of borrowers and the Federal fiscal interest respecting loans that the agency has guaranteed when the agency learns that a participating school or holder of loans is experiencing problems that threaten the solvency of the school or holder, including—
(i) Conducting on-site program reviews;
(ii) Providing training and technical assistance, if appropriate;
(iii) Filing a proof of claim with a bankruptcy court for recovery of any funds due the agency and any refunds due to borrowers on FFEL loans that it has guaranteed when the agency learns that a school has filed a bankruptcy petition;
(iv) Promptly notifying the Secretary that the agency has determined that a school or holder of loans is experiencing potential solvency problems; and
(v) Promptly notifying the Secretary of the results of any actions taken by the agency to protect Federal funds involving such a school or holder.
(a)
(b)
(2) At no point during the periods specified in paragraphs (c), (d), and (e) of this section may the lender permit the occurrence of a gap in collection activity, as defined in paragraph (j) of this section, of more than 45 days (60 days in the case of a transfer).
(3) As part of one of the collection activities provided for in this section, the lender must provide the borrower with information on the availability of the Student Loan Ombudsman's office.
(c)
(d)
(2) At least two of the collection letters required under paragraph (d)(1) of this section must warn the borrower that, if the loan is not paid, the lender will assign the loan to the guaranty agency that, in turn, will report the default to all national credit bureaus, and that the agency may institute proceedings to offset the borrower's State and Federal income tax refunds and other payments made by the Federal Government to the borrower or to garnish the borrower's wages, or to assign the loan to the Federal Government for litigation against the borrower.
(3) Following the lender's receipt of a payment on the loan or a correct address for the borrower, the lender's receipt from the drawee of a dishonored check received as a payment on the loan, the lender's receipt of a correct telephone number for the borrower, or the expiration of an authorized deferment or forbearance period, the lender is required to engage in only—
(i) Two diligent efforts to contact the borrower by telephone during this period, if the loan is less than 91 days delinquent (121 days delinquent for a loan repayable in installments less frequently than monthly) upon receipt of the payment, correct address, correct telephone number, or returned check, or expiration of the deferment or forbearance; or
(ii) One diligent effort to contact the borrower by telephone during this period if the loan is 91-120 days delinquent (121-180 days delinquent for a loan repayable in installments less frequently than monthly) upon receipt of the payment, correct address, correct telephone number, or returned check, or expiration of the deferment or forbearance.
(4) A lender need not attempt to contact by telephone any borrower who is more than 120 days delinquent (180 days delinquent for a loan repayable in installments less frequent than monthly) following the lender's receipt of—
(i) A payment on the loan;
(ii) A correct address or correct telephone number for the borrower;
(iii) A dishonored check received from the drawee as a payment on the loan; or
(iv) The expiration of an authorized deferment or forbearance.
(e)
(f)
(g)
(h)
(2) Upon receipt of information indicating that it does not know the borrower's current address, the lender must discontinue the collection efforts described in paragraphs (c) through (f) of this section.
(3) If the lender is unable to ascertain the borrower's current address despite its performance of the activities described in paragraph (h)(1) of this section, the lender is excused thereafter from performance of the collection activities described in paragraphs (c) through (f) and (l)(1) through (l)(3) and (l)(5) of this section unless it receives communication indicating the borrower's address before the 241st day of delinquency (the 301st day for loans payable in less frequent installments than monthly).
(4) The activities specified by paragraph (m)(1)(i) or (ii) of this section (with references to the “borrower” understood to mean endorser, reference, relative, individual, or entity as appropriate) meet the requirement that the lender make a diligent effort to contact each individual identified in the borrower's loan file.
(i)
(j)
(1) Beginning on the date that is the day after—
(i) The due date of a payment unless the lender does not know the borrower's address on that date;
(ii) The day on which the lender receives a payment on a loan that remains delinquent notwithstanding the payment;
(iii) The day on which the lender receives the correct address for a delinquent borrower;
(iv) The day on which the lender completes a collection activity;
(v) The day on which the lender receives a dishonored check submitted as a payment on the loan;
(vi) The expiration of an authorized deferment or forbearance period on a delinquent loan; or
(vii) The day the lender receives information indicating it does not know the borrower's current address; and
(2) Ending on the date of the earliest of—
(i) The day on which the lender receives the first subsequent payment or completed deferment request or forbearance agreement;
(ii) The day on which the lender begins the first subsequent collection activity;
(iii) The day on which the lender receives written communication from the borrower relating to his or her account; or
(iv) Default.
(k)
(l)
(1) Mailing or otherwise transmitting to the borrower at an address that the lender reasonably believes to be the borrower's current address a collection letter or final demand letter that satisfies the timing and content requirements of paragraph (c), (d), (e), or (f) of this section;
(2) Making an attempt to contact the borrower by telephone to urge the borrower to begin or resume repayment;
(3) Conducting skip-tracing efforts, in accordance with paragraph (h)(1) or (m)(1)(iii) of this section, to locate a borrower whose correct address or telephone number is unknown to the lender;
(4) Mailing or otherwise transmitting to the guaranty agency a request for default aversion assistance available from the agency on the loan at the time the request is transmitted; or
(5) Any telephone discussion or personal contact with the borrower so long as the borrower is apprised of the account's past-due status.
(m)
(i) A successful effort to contact the borrower by telephone;
(ii) At least two unsuccessful attempts to contact the borrower by telephone at a number that the lender reasonably believes to be the borrower's correct telephone number; or
(iii) An unsuccessful effort to ascertain the correct telephone number of a borrower, including, but not limited to, a directory assistance inquiry as to the borrower's telephone number, and sending a letter to or making a diligent effort to contact each reference, relative, and individual identified in the most recent loan application or most recent school certification for that borrower held by the lender. The lender may contact a school official other than the financial aid administrator who reasonably may be expected to know the borrower's address or telephone number.
(2) If the lender is unable to ascertain the borrower's correct telephone number despite its performance of the activities described in paragraph (m)(1)(iii) of this section, the lender is excused thereafter from attempting to
(3) The activities specified by paragraph (m)(1) (i) or (ii) of this section (with references to “the borrower” understood to mean endorser, reference, relative, or individual as appropriate), meet the requirement that the lender make a diligent effort to contact each endorser or each reference, relative, or individual identified on the borrower's most recent loan application or most recent school certification.
(n)
(i) Make a diligent effort to contact the endorser by telephone; and
(ii) Send the endorser on the loan two letters advising the endorser of the delinquent status of the loan and urging the endorser to make the required payments on the loan with at least one letter containing the information described in paragraph (d)(2) of this section (with references to “the borrower” understood to mean the endorser).
(2) On or after the 241st day of delinquency (the 301st day for loans payable in less frequent installments than monthly) the lender must send a final demand letter to the endorser requiring repayment of the loan in full and notifying the endorser that a default will be reported to a national credit bureau. The lender must allow the endorser at least 30 days after the date the letter is mailed to respond to the final demand letter and to bring the loan out of default before filing a default claim on the loan.
(3) Unless the letter specified under paragraph (n)(2) of this section has already been sent, upon receipt of information indicating that it does not know the endorser's current address or telephone number, the lender must diligently attempt to locate the endorser through the use of effective commercial skip-tracing techniques. This effort must include an inquiry to directory assistance.
(o)
(a) The lender shall immediately send to the borrower a final demand letter meeting the requirements of § 682.411(f) when it learns and can substantiate that the borrower or the student on whose behalf a parent has borrowed, without the lender or school's knowledge at the time the loan was made, provided false or erroneous information or took actions that caused the student or borrower—
(1) To be ineligible for all or a portion of a loan made under this part;
(2) To receive a Stafford loan subject to payment of Federal interest benefits as provided under § 682.301 for which he or she was ineligible; or
(3) To receive loan proceeds for a period of enrollment from which he or she has withdrawn or been expelled prior to the first day of classes or during which he or she failed to attend school and has not paid those funds to the school or repaid them to the lender.
(b) The lender shall neither bill the Secretary for nor be entitled to interest benefits on a loan after it learns that one of the conditions described in paragraph (a) of this section exists with respect to the loan.
(c) In the final demand letter transmitted under paragraph (a) of this section, the lender shall demand that within 30 days from the date the letter is mailed the borrower repay in full any principal amount for which the borrower is ineligible and any accrued interest, including interest and all special allowance paid by the Secretary.
(d) If the borrower repays the amounts described in paragraph (c) of this section within the 30-day period, the lender shall—
(1) On its next quarterly interest billing submitted under § 682.305, refund to the Secretary the interest benefits and special allowance repaid by the borrower and all other interest benefits and special allowance previously paid by the Secretary on the ineligible portion of the loan; and
(2) Treat that payment of the principal amount of the ineligible portion of the loan as a prepayment of principal.
(e) If a borrower fails to comply with the terms of a final demand letter described in paragraph (a) of this section, the lender shall treat the entire loan as in default, and—
(1) With its next quarterly interest billing submitted under § 682.305, refund to the Secretary the amount of the interest benefits received from the Secretary on the ineligible portion of the loan, whether or not repaid by the borrower; and
(2) Within the time specified in § 682.406(a)(5), file a default claim thereon with the guaranty agency for the entire unpaid balance of principal and accrued interest.
(a)(1) The Secretary requires a lender and its third-party servicer administering any aspect of the FFEL programs under a contract with the lender to repay interest benefits and special allowance or other compensation received on a loan guaranteed by a guaranty agency, pursuant to paragraph (a)(2) of this section—
(i) For any period beginning on the date of a failure by the lender or servicer, with respect to the loan, to comply with any of the requirements set forth in § 682.406(a)(1)-(a)(6), (a)(9), and (a)(12);
(ii) For any period beginning on the date of a failure by the lender or servicer, with respect to the loan, to meet a condition of guarantee coverage established by the guaranty agency, to the date, if any, on which the guaranty agency reinstated the guarantee coverage pursuant to policies and procedures established by the agency;
(iii) For any period in which the lender or servicer, with respect to the loan, violates the requirements of subpart C of this part; and
(iv) For any period beginning on the day after the Secretary's obligation to pay special allowance on the loan terminates under § 682.302(d).
(2) For purposes of this section, a lender and any applicable third-party servicer shall be considered jointly and severally liable for the repayment of any interest benefits and special allowance paid as a result of a violation of applicable requirements by the servicer in administering the lender's FFEL programs.
(3) For purposes of paragraph (a)(2) of this section, the relevant third-party servicer shall repay any outstanding liabilities under paragraph (a)(2) of this section only if—
(i) The Secretary has determined that the servicer is jointly and severally liable for the liabilities; and
(ii) (A) The lender has not repaid in full the amount of the liability within 30 days from the date the lender receives notice from the Secretary of the liability;
(B) The lender has not made other satisfactory arrangements to pay the amount of the liability within 30 days from the date the lender receives notice from the Secretary of the liability; or
(C) The Secretary is unable to collect the liability from the lender by offsetting the lender's bill to the Secretary for interest benefits or special allowance, if—
(
(
(b)(1) The Secretary requires a guaranty agency to repay reinsurance payments received on a loan if the lender, third-party servicer, if applicable, or the agency failed to meet the requirements of § 682.406(a).
(2) The Secretary may require a guaranty agency to repay reinsurance payments received on a loan or to assign FFEL loans to the Department if the agency fails to meet the requirements of § 682.410.
(c)(1) In addition to requiring repayment of reinsurance payments pursuant to paragraph (b) of this section, the Secretary may take one or more of the following remedial actions against a guaranty agency or third-party servicer administering any aspect of the FFEL programs under a contract with the guaranty agency, that makes an incomplete or incorrect statement in connection with any agreement entered into under this part or violates any applicable Federal requirement:
(i) Require the agency to return payments made by the Secretary to the agency.
(ii) Withhold payments to the agency.
(iii) Limit the terms and conditions of the agency's continued participation in the FFEL programs.
(iv) Suspend or terminate agreements with the agency.
(v) Impose a fine on the agency or servicer. For purposes of assessing a fine on a third-party servicer, a repeated mechanical systemic unintentional error shall be counted as one violation, unless the servicer has been cited for a similar violation previously and had failed to make the appropriate corrections to the system.
(vi) Require repayment from the agency and servicer pursuant to paragraph (c)(2) of this section, of interest, special allowance, and reinsurance paid on Consolidation loan amounts attributed to Consolidation loans for which the certification required under § 682.206(f)(1) is not available.
(vii) Require repayment from the agency or servicer, pursuant to paragraph (c)(2) of this section, of any related payments that the Secretary became obligated to make to others as a result of an incomplete or incorrect statement or a violation of an applicable Federal requirement.
(2) For purposes of this section, a guaranty agency and any applicable third-party servicer shall be considered jointly and severally liable for the repayment of any interest benefits, special allowance, reinsurance paid, or other compensation on Consolidation loan amounts attributed to Consolidation loans as specified in § 682.413(c)(1)(vi) as a result of a violation by the servicer administering any aspect of the FFEL programs under a contract with that guaranty agency.
(3) For purposes of paragraph (c)(2) of this section, the relevant third-party servicer shall repay any outstanding liabilities under paragraph (c)(2) of this section only if—
(i) The Secretary has determined that the servicer is jointly and severally liable for the liabilities; and
(ii) (A) The guaranty agency has not repaid in full the amount of the liability within 30 days from the date the guaranty agency receives notice from the Secretary of the liability;
(B) The guaranty agency has not made other satisfactory arrangements to pay the amount of the liability within 30 days from the date the guaranty agency receives notice from the Secretary of the liability; or
(C) The Secretary is unable to collect the liability from the guaranty agency by offsetting the guaranty agency's first reinsurance claim to the Secretary, if—
(
(
(d)(1) The Secretary follows the procedures described in 34 CFR part 668, subpart G, applicable to fine proceedings against schools, in imposing a fine against a lender, guaranty agency, or third-party servicer. References to “the institution” in those regulations shall be understood to mean the lender, guaranty agency, or third-party servicer, as applicable, for this purpose.
(2) The Secretary also follows the provisions of section 432(g) of the Act in imposing a fine against a guaranty agency or lender.
(e)(1)(i) The Secretary's decision to require repayment of funds, withhold funds, or to limit or suspend a lender, guaranty agency, or third party servicer from participation in the
(ii) The Secretary's decision to terminate a guaranty agency's participation in the FFEL Program after September 24, 1998 does not become final until the Secretary provides the agency with written notice of the intended action and provides an opportunity for a hearing on the record.
(2)(i) The Secretary may withhold payments from an agency or suspend an agreement with an agency prior to giving notice and an opportunity to be heard if the Secretary finds that emergency action is necessary to prevent substantial harm to Federal interests.
(ii) The Secretary follows the notice and show cause procedures described in § 682.704 applicable to emergency actions against lenders in taking an emergency action against a guaranty agency.
(3) The Secretary follows the procedures in 34 CFR 30.20-30.32 in collecting a debt by offset against payments otherwise due a guaranty agency or lender.
(f) Notwithstanding paragraphs (a)-(e) of this section, the Secretary may waive the right to require repayment of funds by a lender or agency if in the Secretary's judgment the best interests of the United States so require. The Secretary's waiver policy for violations of § 682.406(a)(3) or (a)(5) is set forth in appendix D to this part.
(g) The Secretary's final decision to require repayment of funds or to take other remedial action, other than a fine, against a lender or guaranty agency under this section is conclusive and binding on the lender or agency.
A decision by the Secretary under this section is subject to judicial review under 5 U.S.C. 706 and 41 U.S.C. 321-322.
(a)
(ii) The agency shall maintain—
(A) All documentation supporting the claim filed by the lender;
(B) Notices of changes in a borrower's address;
(C) A payment history showing the date and amount of each payment received from or on behalf of the borrower by the guaranty agency, and the amount of each payment that was attributed to principal, accrued interest, and collection costs and other charges, such as late charges;
(D) A collection history showing the date and subject of each communication between the agency and the borrower or endorser relating to collection of a defaulted loan, each communication between the agency and a credit bureau regarding the loan, each effort to locate a borrower whose address was unknown at any time, and each request by the lender for default aversion assistance on the loan;
(E) Documentation regarding any wage garnishment actions initiated by the agency on the loan;
(F) Documentation of any matters relating to the collection of the loan by tax-refund offset; and
(G) Any additional records that are necessary to document its right to receive or retain payments made by the Secretary under this part and the accuracy of reports it submits to the Secretary.
(2) A guaranty agency must retain the records required for each loan for not less than 3 years following the date the loan is repaid in full by the borrower, or for not less than 5 years following the date the agency receives payment in full from any other source. However, in particular cases, the Secretary may require the retention of records beyond these minimum periods.
(3) A guaranty agency shall retain a copy of the audit report required under § 682.410(b) for not less than five years after the report is issued.
(4)(i) The guaranty agency shall require a participating lender to maintain current, complete, and accurate records of each loan that it holds, including, but not limited to, the records described in paragraph (a)(4)(ii) of this section. The records must be maintained in a system that allows ready identification of each loan's current status.
(ii) The lender shall keep—
(A) A copy of the loan application if a separate application was provided to the lender;
(B) A copy of the signed promissory note;
(C) The repayment schedule;
(D) A record of each disbursement of loan proceeds;
(E) Notices of changes in a borrower's address and status as at least a half-time student;
(F) Evidence of the borrower's eligibility for a deferment;
(G) The documents required for the exercise of forbearance;
(H) Documentation of the assignment of the loan;
(I) A payment history showing the date and amount of each payment received from or on behalf of the borrower, and the amount of each payment that was attributed to principal, interest, late charges, and other costs;
(J) A collection history showing the date and subject of each communication between the lender and the borrower or endorser relating to collection of a delinquent loan, each communication other than regular reports by the lender showing that an account is current, between the lender and a credit bureau regarding the loan, each effort to locate a borrower whose address is unknown at any time, and each request by the lender for default aversion assistance on the loan;
(K) Documentation of any MPN confirmation process or processes; and
(L) Any additional records that are necessary to document the validity of a claim against the guarantee or the accuracy of reports submitted under this part.
(iii) Except as provided in paragraph (a)(4)(iv) of this section, a lender must retain the records required for each loan for not less than 3 years following the date the loan is repaid in full by the borrower, or for not less than five years following the date the lender receives payment in full from any other source. However, in particular cases, the Secretary or the guaranty agency may require the retention of records beyond this minimum period.
(iv) A lender shall retain a copy of the audit report required under § 682.305(c) for not less than five years after the report is issued.
(5)(i) A guaranty agency or lender may store the records specified in paragraphs (a)(4)(ii)(C)-(L) of this section in accordance with 34 CFR 668.24(d)(3)(i) through (iv).
(ii) If a promissory note was signed electronically, the guaranty agency or lender must store it electronically and it must be retrievable in a coherent format.
(iii) A lender or guaranty agency holding a promissory note must retain the original or a true and exact copy of the promissory note until the loan is paid in full or assigned to the Secretary. When a loan is paid in full by the borrower, the lender or guaranty agency must return either the original or a true and exact copy of the note to the borrower or notify the borrower that the loan is paid in full, and retain a copy for the prescribed period.
(b)
(1) A report concerning the status of the agency's reserve fund and the operation of the agency's loan guarantee program at the time and in the manner that the Secretary may reasonably require. The Secretary does not pay the agency any funds, the amount of which are determined by reference to data in the report, until a complete and accurate report is received.
(2) Annually, for each State in which it operates, a report of the total guaranteed loan volume, default volume, and default rate for each of the following categories of originating lenders on all loans guaranteed after December 31, 1980:
(i) Schools.
(ii) State or private nonprofit lenders.
(iii) Commercial financial institutions (banks, savings and loan associations, and credit unions).
(iv) All other types of lenders.
(3) By July 1 of each year, a report on—
(i) Its eligibility criteria for schools and lenders;
(ii) Its procedures for the limitation, suspension, and termination of schools and lenders;
(iii) Any actions taken in the preceding 12 months to limit, suspend, or terminate the participation of a school or lender in the agency's program; and
(iv) The steps the agency has taken to ensure its compliance with § 682.410(c), including the identity of any law enforcement agency with which the agency has made arrangements for that purpose.
(4) Information consisting of those extracts from its computer data base, and supplied in the medium and the format, prescribed in the Stafford, SLS, and PLUS Loan Tape Dump Procedures (ED Forms 1070 and 1071).
(5) Any other information concerning its loan insurance program requested by the Secretary.
(c)
(2) A guaranty agency shall require in its agreement with a lender or in its published rules or procedures that the lender or its agent give the Secretary or the Secretary's designee and the guaranty agency access to the lender's records for inspection and copying in order to verify the accuracy of the information provided by the lender pursuant to § 682.401(b) (21) and (22), and the right of the lender to receive or retain payments made under this part, or to permit the Secretary or the agency to enforce any right acquired by the Secretary or the agency under this part.
(a)(1) A lender or lender servicer (as an agent for an eligible lender) designated for exceptional performance under paragraph (b) of this section shall receive 100 percent reimbursement on all claims submitted for insurance during the 12-month period following the date the lender or lender servicer and appropriate guaranty agencies receive notification of the designation of the eligible lender or lender servicer under paragraph (b) of this section. A guaranty agency or a guaranty agency servicer (as an agent for a guaranty agency) designated for exceptional performance under paragraph (c) of this section shall receive the applicable reinsurance rate under section 428(c)(1) of the Act on all claims submitted for payments by the guaranty agency or guaranty agency servicer during the 12-month period following the date the guaranty agency receives notification of its designation, or its servicer's designation, under paragraph (c) of this section. A notice of designation for exceptional performance under this section is deemed to have been received by the lender, servicer, or guaranty agency no later than 3 days after the date the notice is mailed, unless the lender, servicer, or
(2) To receive a designation for exceptional performance under paragraph (a)(1) of this section, a lender, servicer, and guaranty agency must submit to the Secretary—
(i) A written request for designation for exceptional performance that includes—
(A) The applicant's name and address;
(B) A contact person;
(C) Its ED identification number, if applicable;
(D) The name and address of applicable guarantors; and
(E) A copy of an annual financial audit performed in accordance with the Audit Guide developed by the U.S. Department of Education, Office of Inspector General, or one of the following as appropriate:
(
(
(
(ii) If the applicant is a servicer, a statement signed by the owner or chief executive officer of the applicant certifying that the applicant meets the definition of a servicer contained in paragraph (d)(3) of this section; and
(iii)(A) A compliance audit of its loan portfolio, conducted by a qualified independent organization meeting the criteria in paragraph (b)(9) of this section, that yields a compliance performance rating of 97 percent or higher of all due diligence requirements applicable to each loan, on average, with respect to the collection of delinquent or defaulted loans and satisfying the requirements in paragraph (b)(1)(iv) of this section or, if applicable, paragraph (c)(2)(i) of this section. The audit period may end no more than 90 days prior to the date the lender, servicer or guaranty agency submits its request for designation.
(B) To satisfy the requirement of paragraph (a)(2)(iii)(A) of this section, a servicer may submit its annual compliance audit under 34 CFR 682.416(e), if the servicer includes in its report a measure of its compliance performance rating required under paragraph (a)(2)(iii)(A) of this section, if this audit is performed in accordance with an audit guide developed by the U.S. Department of Education, Office of Inspector General.
(3) The cost of audits for determining eligibility and continued compliance under this section is the responsibility of the lender, servicer, or guaranty agency.
(4) A lender or servicer shall also submit the information in paragraph (a)(2) (i), (ii), or (iii) of this section to each appropriate guaranty agency.
(5) A lender may be designated for exceptional performance for loans that it services itself. A lender servicer may be designated for exceptional performance only for all loans it services.
(6)(i) To prevent a lapse of a lender's, servicer's, or guaranty agency's exceptional performance status after the end of the 12-month period, the lender, servicer, or guaranty agency shall submit updated information required under paragraph (a)(2) of this section to the Secretary no later than 90 days after the end of the annual audit period.
(ii) Upon the Secretary's determination that the lender, servicer, or guaranty agency maintained at least a 97 percent compliance performance rate and satisfies the other requirements for designation, the Secretary notifies the lender, servicer, or guaranty agency that its redesignation for exceptional performance begins on the date following the last day of the previous 12-month period for which it received designation for exceptional performance. However, a lender's, servicer's, or guaranty agency's designation for exceptional performance continues until
(iii) The Secretary notifies the lender or lender servicer and the appropriate guaranty agency within 60 days after the date the Secretary receives the information, listed in paragraph (a)(2) of this section, from the eligible lender or lender servicer, that the lender's or lender servicer's reapplication for designation for exceptional performance has been approved or denied. A notice under paragraph (a)(6)(ii) of this section is determined to have been received by the lender, servicer, or guaranty agency no later than 3 days after the notice is mailed, unless the lender, servicer, or guaranty agency is able to prove otherwise.
(b)
(i) The annual compliance audit of collection activities required for FFEL Program loans under § 682.411(c) through (h), and (m), if applicable, serviced during the audit period;
(ii) Information from any guaranty agency regarding an eligible lender or lender servicer desiring designation, including, but not limited to, any information suggesting that the lender's or lender servicer's request for designation should not be approved;
(iii) Any other information in the possession of the Secretary, or submitted to the Secretary by any other agency or office of the Federal Government; and
(iv) Evidence indicating that the lender or lender servicer has complied with the requirements for converting FFEL Program loans to repayment under § 682.209(a), and the timely filing requirements under §§ 682.402(g)(2) and 682.406(a)(5), in accordance with the audit guide as published by the U.S. Department of Education, Office of Inspector General. The audit submitted under paragraph (b)(1)(i) of this section may satisfy this requirement, if a separate sample of loans is used.
(2) The Secretary informs the eligible lender or lender servicer, and the appropriate guaranty agency, that the lender's or lender servicer's request for designation as an exceptional lender or lender servicer has been approved, unless the results of the audit are persuasively rebutted by information under paragraphs (b) (1)(ii) or (iii) of this section. If the request for designation is not approved, the Secretary informs the lender or lender servicer and the appropriate guaranty agency or agencies of the reason the application is not approved.
(3) In calculating a lender's or lender servicer's compliance rating, as referenced in paragraph (a)(2)(iii) of this section, the universe for the audit must include all loans in the lender's or lender servicer's FFEL Program portfolio that are serviced during the audit period performed under the Department's regulations in §§ 682.411, 682.209(a), 682.402(g)(2), and 682.406(a)(5). The calculation may consider only due diligence activities applicable to the audit period. The numerator must include the total number of collection activities successfully completed, in accordance with program regulations, that are serviced during the audit period. The denominator must include the total number of collection activities required to be performed, in compliance with program regulations, that are serviced during the audit period. Using statistical sampling and evaluation techniques identified in an audit guide prepared by the Department's Office of Inspector General, a random sample of loans must be selected and evaluated.
(4) The Secretary notifies the lender or lender servicer and the appropriate guaranty agency within 60 days after the date the Secretary receives the information, listed in paragraph (a)(2) of this section, from the eligible lender or lender servicer, that the lender's or lender servicer's application for designation for exceptional performance has been approved or denied.
(5)(i) Except as provided under paragraph (b)(8) of this section, a guaranty agency may not refuse, solely on the basis of a violation of repayment conversion, due diligence requirements, or timely filing requirements, to pay an eligible lender or lender servicer, designated for exceptional performance, 100 percent of the unpaid principal and
(ii) A guaranty agency or the Secretary may require the lender or lender servicer to repurchase a loan if the agency determines the loan should not have been submitted as a claim. A guaranty agency may not require repurchase of a loan based solely on the lender's violation of the requirement relating to repayment conversion, due diligence, or timely filing. The guaranty agency must pay claims to a lender or lender servicer designated for exceptional performance in accordance with this paragraph for the one-year period following the date the guaranty agency receives notification of the lender's or lender servicer's designation under paragraph (b)(2) of this section, unless the Secretary notifies the guaranty agency that the lender's or lender servicer's designation for exceptional performance has been revoked.
(6)(i) To maintain its designation for exceptional performance, the lender or lender servicer must have a quarterly compliance audit of the due diligence in collection activities required for FFEL Program loans under § 682.411(c)-(h), and (m), if applicable, and for converting FFEL Program loans to repayment under § 682.209(a) and timely filing requirements under §§ 682.402(g)(2) and 682.406(a)(5) conducted by a qualified independent organization meeting the criteria in paragraph (b)(9) of this section that results in a compliance rating for the quarter of not less than 97 percent. The audit must indicate a compliance performance rating of not less than 97 percent for two consecutive months or 90 percent for any month. The quarterly audit may not include any period covered by the annual financial and compliance audit under paragraph (a)(2) of this section. The results of the quarterly compliance audit must be submitted to the Secretary and to the appropriate guaranty agencies within 90 days following the end of each quarter.
(ii) If a lender or lender servicer has been designated for exceptional performance for at least 15 months, a lender or lender servicer may petition the Secretary for permission to have its internal auditors perform the subsequent quarterly compliance audits required by paragraph (b)(6)(i) of this section. If the Secretary approves the request, the lender's or lender servicer's annual audit must assess the reliability of the procedures used by the lender's or lender servicer's internal auditor in performing the quarterly audits.
(iii) The lender or lender servicer shall perform three quarterly audits and one annual audit that includes a representative sample of fourth quarter collection activities to satisfy the requirements of this paragraph.
(7)(i) Insurance payments made on eligible claims submitted by a lender or lender servicer designated for exceptional performance are not subject to additional review of repayment conversion, due diligence, and timely filing requirements, or to required repurchase by the lender or lender servicer, unless the Secretary determines that the eligible lender or lender servicer engaged in fraud or other purposeful misconduct in obtaining designation for exceptional performance. Notwithstanding the payment requirements in this paragraph, nothing prohibits the guaranty agency or the Secretary from reviewing the lender's or lender servicer's activities in regard to the loans paid under this paragraph as part of program oversight responsibilities, or for requiring the lender to repurchase a loan if the agency determines the loan should not have been submitted as a claim. The lender shall file, and the guaranty agency shall maintain, the documentation the guaranty agency normally requires its lenders to file with respect to the collection history of each loan.
(ii) A lender or lender servicer designated under this section that fails to service loans or otherwise comply with applicable program regulations is considered in violation of 31 U.S.C. 3729.
(8)(i) The Secretary revokes the designation of a lender or lender servicer for exceptional performance if—
(A) The quarterly compliance audit required under paragraph (b)(6) of this section is submitted to the Secretary and indicates that the lender or lender servicer failed to maintain not less than 97 percent compliance with due diligence standards for the quarter, or not less than 97 percent compliance for 2 consecutive months, or 90 percent for any month; or
(B) Any quarterly audit required in paragraph (b)(6) of this section is not received by the Secretary within 90 days following the end of each quarter.
(ii) The Secretary may revoke the designation of an exceptional lender or lender servicer if—
(A) The Secretary determines the eligible lender or lender servicer failed to maintain an overall level of regulatory compliance consistent with the audit submitted by the lender or lender servicer;
(B) The Secretary has reason to believe the lender or lender servicer may have engaged in fraud in securing its designation for exceptional performance; or
(C) The lender or lender servicer fails to service loans in accordance with program regulations. For purposes of this paragraph, a lender or lender servicer fails to service loans in accordance with program regulations if the Secretary determines that the lender or lender servicer has committed serious and material violations of the regulations.
(iii) The date on which the event or condition occurred is the effective date of the revocation, except for revocation under paragraph (a)(6) of this section, which is effective at the close of the 12-month period for which the lender or lender servicer received designation for exceptional performance.
(9) Public accountants, public accounting firms, and external government audit organizations that meet the qualification and independence standards contained in Government Auditing Standards published by the Comptroller General of the United States are acceptable entities to perform the audits required under paragraphs (a)(2)(iii)(A) and (b)(6) of this section.
(c)(1)(i) Except as provided under paragraph (c)(8) of this section, the Secretary pays the applicable reinsurance rate under section 428(b)(1)(G) of the Act on all claims submitted by a guaranty agency or guaranty agency servicer that has been designated for exceptional performance.
(ii) A guaranty agency may be designated for exceptional performance for loans that it services itself.
(iii) A guaranty agency servicer may be designated for exceptional performance for loans it services.
(iv) A guaranty agency or guaranty agency servicer is designated for exceptional performance for a 12-month period following the receipt, by the guaranty agency or guaranty agency servicer, of the Secretary's notification of designation.
(v) A notice under this paragraph is determined to have been received no later than 3 days after the date the notice is mailed, unless the guaranty agency or guaranty agency servicer is able to prove otherwise.
(2) The Secretary determines whether to designate a guaranty agency or guaranty agency servicer for exceptional performance based upon—
(i) The annual financial audit and a compliance audit of collection activities, including timely claim payment and timely reinsurance filing required for FFEL Program loans under §§ 682.410(b)(6)(i) through (xii), and 682.406 (a)(8) and (a)(9); and
(ii) Any other information in the possession of the Secretary.
(3) The Secretary informs the guaranty agency or guaranty agency servicer that its request for designation for exceptional performance has been approved, unless the results of the audit are persuasively rebutted by other information received by the Secretary. If the Secretary does not approve the guaranty agency's or guaranty agency servicer's request for designation, the Secretary informs the guaranty agency or guaranty agency servicer of the reason the application was not approved.
(4) In calculating a guaranty agency's or guaranty agency servicer's compliance rating, as referenced in paragraph (a)(2)(iii) of this section, the Secretary requires that the universe of loans in the audit sample must consist of all loans in the guaranty agency's or guaranty agency servicer's FFEL Program portfolio that are serviced during the audit period performed under the Department's regulations in §§ 682.410(b)(6)(i) through (xii) and 682.406 (a)(8) and (a)(9). The calculation may consider only the due diligence activities that were or should have been conducted during the audit period. The numerator must include the total number of collection activities successfully completed in accordance with program regulations on loans that were serviced during the audit period. The denominator must include the total number of collection activities required to be performed in compliance with program regulations on loans that were serviced during the audit period. Using statistical sampling and evaluation techniques identified in an audit guide prepared by the Department's Office of Inspector General, a random sample of loans must be selected and evaluated.
(5) The Secretary notifies a guaranty agency or guaranty agency servicer, within 60 days after the date the Secretary receives the information listed in paragraph (a)(2) of this section whether the guaranty agency's or guaranty agency servicer's application for designation for exceptional performance has been approved or denied.
(6)(i) To maintain its status as an exceptional guaranty agency or guaranty agency servicer, the guaranty agency or guaranty agency servicer must have a quarterly compliance audit of the due diligence in collection activities of defaulted FFEL Program loans under §§ 682.410(b)(6)(i) through (xii) and 682.406(a)(8) and (a)(9) conducted by a qualified independent organization meeting the criteria in paragraph (c)(9) of this section. The audit must yield a compliance performance rating of not less than 97 percent. The quarterly audit may not include any period covered by the annual financial and compliance audit required under paragraph (a)(2) of this section. The results of the quarterly compliance audit must be submitted to the Secretary within 90 days following the end of each quarter.
(ii) If the guaranty agency or guaranty agency servicer has been designated for exceptional performance for at least 15 months, the guaranty agency or a guaranty agency servicer may petition the Secretary for permission to have its internal auditors perform subsequent quarterly compliance audits required by paragraph (c)(6)(i) of this section. If the Secretary approves the request, the guaranty agency's or guaranty agency servicer's annual audit must assess the reliability of the procedures used by the guaranty agency's or the guaranty agency servicer's internal auditor in performing the quarterly audits.
(7)(i) Payments of reinsurance made on claims, under the FFEL Program, submitted by a guaranty agency or guaranty agency servicer designated for exceptional performance are not subject to repayment based on additional review of due diligence activities, including timely claim payment, or timely filing for reinsurance covering a period during which the guaranty agency or guaranty agency servicer was designated for any reason other than a determination by the Secretary that the eligible guaranty agency or guaranty agency servicer engaged in fraud or other purposeful misconduct in obtaining designation for exceptional performance.
(ii) A guaranty agency designated under this section that fails to service loans or otherwise comply with applicable program regulations is considered in violation of 31 U.S.C. 3729.
(8)(i) The Secretary may revoke the designation of a guaranty agency or guaranty agency servicer for exceptional performance if the Secretary has reason to believe the guaranty agency or guaranty agency servicer fraudulently obtained its designation for exceptional performance.
(ii) The Secretary may revoke the designation for exceptional performance upon 30 days’ notice, and an opportunity for a hearing before the Secretary, if the Secretary finds that the guaranty agency or guaranty agency servicer failed to maintain an acceptable overall level of regulatory compliance.
(9) A qualified independent organization is an organization that meets the criteria in paragraph (b)(9) of this section.
(d)
(1)
(2)
(3)
(i) Has substantial experience in servicing and collecting consumer loans or student loans;
(ii) Has an annual independent financial audit that is furnished to the Secretary and any other parties designated by the Secretary;
(iii) Has business systems capable of meeting the requirements of part B of title IV of the Act and applicable regulations;
(iv) Has adequate personnel knowledgeable about the student loan programs authorized by part B of title IV of the Act; and
(v) Does not knowingly have any owner, majority shareholder, director, or officer of the entity who has been convicted of a felony.
(a)
(1) Provides the services and administrative resources necessary to fulfill its contract with a lender or guaranty agency, and conducts all of its contractual obligations that apply to the FFEL programs in accordance with FFEL programs regulations;
(2) Has business systems including combined automated and manual systems, that are capable of meeting the requirements of part B of Title IV of the Act and with the FFEL programs regulations; and
(3) Has adequate personnel who are knowledgeable about the FFEL programs.
(b)
(c)
(2) In response to a request from the Secretary, the servicer shall provide evidence to demonstrate that it meets the administrative capability and financial responsibility standards in this section.
(3) The servicer may also provide evidence of why administrative action is unwarranted if it is unable to demonstrate that it meets the standards of this section.
(4) Based on the review of the materials provided by the servicer, the Secretary determines if the servicer meets the standards in this part. If the servicer does not, the Secretary may initiate an administrative proceeding under subpart G.
(d)
(1)(i) The servicer; its owner, majority shareholder, or chief executive officer; any person employed by the servicer in a capacity that involves the administration of a Title IV, HEA program or the receipt of Title IV, HEA program funds; any person, entity, or officer or employee of an entity with which the servicer contracts where that person, entity, or officer or employee of the entity acts in a capacity that involves the administration of a
(A) The funds that were fraudulently obtained, or criminally acquired, used, or expended have been repaid to the United States, and any related financial penalty has been paid;
(B) The persons who were convicted of, or pled
(C) At least five years have elapsed from the date of the conviction,
(ii) The servicer, or any principal or affiliate of the servicer (as those terms are defined in 34 CFR part 85), is—
(A) Debarred or suspended under Executive Order (E.O.) 12549 (3 CFR, 1986 Comp., p. 189) or the Federal Acquisition Regulations (FAR), 48 CFR part 9, subpart 9.4; or
(B) Engaging in any activity that is a cause under 34 CFR 85.305 or 85.405 for debarment or suspension under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4; and
(2) Upon learning of a conviction, plea, or administrative or judicial determination described in paragraph (d)(1) of this section, the servicer does not promptly remove the person, agency, or organization from any involvement in the administration of the servicer's participation in Title IV, HEA programs, including, as applicable, the removal or elimination of any substantial control, as determined under 34 CFR 668.15, over the servicer.
(e)
(i) The servicer contracts with only one lender or guaranty agency; and
(ii) The audit of that lender's or guaranty agency's FFEL programs involves every aspect of the servicer's administration of those FFEL programs.
(2) The audit must—
(i) Examine the servicer's compliance with the Act and applicable regulations;
(ii) Examine the servicer's financial management of its FFEL program activities;
(iii) Be conducted in accordance with the standards for audits issued by the United States General Accounting Office's (GAO's)
(iv) Except for the initial audit, be conducted at least annually and be submitted to the Secretary within six months of the end of the audit period. The initial audit must be an annual audit of the servicer's first full fiscal year beginning on or after July 1, 1994, and include any period from the beginning of the first full fiscal year. The audit report must be submitted to the Secretary within six months of the end of the audit period. Each subsequent audit must cover the servicer's activities for the one-year period beginning no later than the end of the period covered by the preceding audit.
(3) With regard to a third-party servicer that is a governmental entity, the audit required by this paragraph must be conducted in accordance with 31 U.S.C. 7502 and 34 CFR part 80, appendix G.
(4) With regard to a third-party servicer that is a nonprofit organization, the audit required by this paragraph must be conducted in accordance with Office of Management and Budget (OMB) Circular A-133, “Audit of Institutions of Higher Education and Other Nonprofit Institutions,” as incorporated in 34 CFR 74.61(h)(3).
(f)
(a)
(1) A guaranty agency must return to the Secretary a portion of its Federal Fund that the Secretary has determined is unnecessary to pay the program expenses and contingent liabilities of the agency; and
(2) A guaranty agency must require the return to the agency or the Secretary of Federal funds or assets within the meaning of section 422(g)(1) of the Act held by or under the control of any other entity that the Secretary determines are necessary to pay the program expenses and contingent liabilities of the agency or that are required for the orderly termination of the guaranty agency's operations and the liquidation of its assets.
(b)
(2) If the Secretary initiates a process to recover unnecessary Federal funds, the Secretary requires the return of a portion of the Federal funds that the Secretary determines will permit the agency to—
(i) Have a Federal Fund ratio of at least 2.0 percent under § 682.410(a)(10) at the time of the determination; and
(ii) Meet the minimum Federal Fund requirements under § 682.410(a)(10) and retain sufficient additional Federal funds to perform its responsibilities as a guaranty agency during the current Federal fiscal year and the four succeeding Federal fiscal years.
(3)(i) The Secretary makes a determination of the amount of Federal funds needed by the guaranty agency under paragraph (b)(2) of this section on the basis of financial projections for the period described in that paragraph. If the agency provides projections for a period longer than the period referred to in that paragraph, the Secretary may consider those projections.
(ii) The Secretary may require a guaranty agency to provide financial projections in a form and on the basis of assumptions prescribed by the Secretary. If the Secretary requests the agency to provide financial projections, the agency must provide the projections within 60 days of the Secretary's request. If the agency does not provide the projections within the specified time period, the Secretary determines the amount of Federal funds needed by the agency on the basis of other information.
(c)
(2) The notice—
(i) Informs the guaranty agency of the Secretary's determination that Federal funds or assets must be returned;
(ii) Describes the basis for the Secretary's determination and contains sufficient information to allow the
(iii) States the date by which the return of Federal funds or assets must be completed;
(iv) Describes the process for appealing the determination, including the time for filing an appeal and the procedure for doing so; and
(v) Identifies any actions that the guaranty agency must take to ensure that the Federal funds or assets that are the subject of the notice are maintained and protected against use, expenditure, transfer, or other disbursement after the date of the Secretary's determination, and the basis for requiring those actions. The actions may include, but are not limited to, directing the agency to place the Federal funds in an escrow account. If the Secretary has directed the guaranty agency to require the return of Federal funds or assets held by or under the control of another entity, the guaranty agency must ensure that the agency's claims to those funds or assets and the collectability of the agency's claims will not be compromised or jeopardized during an appeal. The guaranty agency must also comply with all other applicable regulations relating to the use of Federal funds and assets.
(d)
(2) A guaranty agency must submit the information described in paragraph (d)(4) of this section within 45 days of the date of the guaranty agency's receipt of the notice of the Secretary's determination unless the Secretary agrees to extend the period at the agency's request. If the agency does not submit that information within the prescribed period, the Secretary's determination is final.
(3) A guaranty agency's appeal of a determination that Federal funds or assets must be returned is considered and decided by a Departmental official other than the official who issued the determination or a subordinate of that official.
(4) In an appeal of the Secretary's determination, the guaranty agency must—
(i) State the reasons the guaranty agency believes the Federal funds or assets need not be returned;
(ii) Identify any evidence on which the guaranty agency bases its position that Federal funds or assets need not be returned;
(iii) Include copies of the documents that contain this evidence;
(iv) Include any arguments that the guaranty agency believes support its position that Federal funds or assets need not be returned; and
(v) Identify the steps taken by the guaranty agency to comply with the requirements referred to in paragraph (c)(2)(v) of this section.
(5)(i) In its appeal, the guaranty agency may request the opportunity to make an oral argument to the deciding official for the purpose of clarifying any issues raised by the appeal. The deciding official provides this opportunity promptly after the expiration of the period referred to in paragraph (d)(2) of this section.
(ii) The agency may not submit new evidence at or after the oral argument unless the deciding official determines otherwise. A transcript of the oral argument is made a part of the record of the appeal and is promptly provided to the agency.
(6) The guaranty agency has the burden of production and the burden of persuading the deciding official that the Secretary's determination should be modified or withdrawn.
(e)
(2) If the guaranty agency to which the determination relates files a notice of appeal of the determination, the deciding official may consider any information submitted in response to the
(f)
(g)
(2) A guaranty agency may not seek judicial review of the Secretary's determination to require the return of Federal funds or assets until the deciding official issues a decision.
(3) The deciding official's written decision includes the basis for the decision. The deciding official bases the decision only on evidence described in the notice of the Secretary's determination and on information properly submitted and considered by the deciding official under this section. The deciding official is bound by all applicable statutes and regulations and may neither waive them nor rule them invalid.
(h)
(2) If the guaranty agency fails to comply with the decision, the Secretary may recover the Federal funds from any funds due the agency from the Department without any further notice or procedure and may take any other action permitted or authorized by law to compel compliance.
(a)
(2) All guaranty agency contracts with respect to its Operating Fund or assets must include a provision stating that the contract is terminable by the Secretary upon 30 days notice to the
(b)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(c)
(a)
(b)
(1) All funds, securities, and other liquid assets of the reserve fund that existed under § 682.410;
(2) The total amount of insurance premiums collected;
(3) Federal payments for default, bankruptcy, death, disability, closed school, false certification, and other claims;
(4) Federal payments for supplemental preclaims assistance activities performed before October 1, 1998;
(5) 70 percent of administrative cost allowances received on or after October 1, 1998 for loans upon which insurance was issued before October 1, 1998;
(6) All funds received by the guaranty agency from any source on FFEL Program loans on which a claim has been paid, within 48 hours of receipt of those
(7) Investment earnings on the Federal Fund;
(8) Revenue derived from the Federal portion of a nonliquid asset, in accordance with § 682.420; and
(9) Other funds received by the guaranty agency from any source that are specifically designated for deposit in the Federal Fund.
(c)
(1) To pay insurance claims;
(2) To transfer default aversion fees to the agency's Operating Fund;
(3) To transfer account maintenance fees to the agency's Operating Fund, if directed by the Secretary;
(4) To refund payments made by or on behalf of a borrower on a loan that has been discharged in accordance with § 682.402;
(5) To pay the Secretary's share of borrower payments, in accordance with § 682.404(g);
(6) For transfers to the agency's Operating Fund, pursuant to § 682.421;
(7) To refund insurance premiums related to loans cancelled or refunded, in whole or in part;
(8) To return to the Secretary portions of the Federal Fund required to be returned by the Act; and
(9) For any other purpose authorized by the Secretary.
(d)
(e)
(f)
(1)
(2)
(i) The sum of—
(A) The original principal amount of all loans guaranteed by the agency; and
(B) The original principal amount of any loans on which the guarantee was transferred to the agency from another guarantor, excluding loan guarantees transferred to another agency pursuant to a plan of the Secretary in response to the insolvency of the agency;
(ii) Minus the original principal amount of all loans on which—
(A) The loan guarantee was cancelled;
(B) The loan guarantee was transferred to another agency;
(C) Payment in full has been made by the borrower;
(D) Reinsurance coverage has been lost and cannot be regained; and
(E) The agency paid claims.
(a)
(b)
(c)
(ii) If a guaranty agency uses the Federal portion of a nonliquid asset for purposes other than the performance of its guaranty activities, the agency must promptly deposit into the Federal Fund an amount representing the net fair value of the use of the asset.
(2) Payments to the Federal Fund required by paragraph (c)(1) of this section must be made not less frequently than quarterly.
(a)
(b)
(2)
(i) A request for the transfer that specifies the desired amount, the date the funds will be needed, and the agency's proposed terms of repayment;
(ii) A projected revenue and expense statement, to be updated annually during the repayment period, that demonstrates that the agency will be able to repay the transferred amount within the repayment period requested by the agency; and
(iii) Certifications by the agency that during the period while the transferred funds are outstanding—
(A) Sufficient funds will remain in the Federal Fund to pay lender claims during the period the transferred funds are outstanding;
(B) The agency will be able to meet the reserve recall requirements of section 422 of the Act;
(C) The agency will be able to meet the statutory minimum reserve level of 0.25 percent, as mandated by section 428(c)(9) of the Act; and
(D) No legal prohibition exists that would prevent the agency from obtaining or repaying the transferred funds.
(c)
(2)
(a)
(b)
(2)
(3)
(c)
(a)
(b)
(1) Amounts authorized by the Secretary to be transferred from the Federal Fund;
(2) Account maintenance fees;
(3) Loan processing and issuance fees;
(4) Default aversion fees;
(5) 30 percent of administrative cost allowances received on or after October 1, 1998 for loans upon which insurance was issued before October 1, 1998;
(6) The portion of the amounts collected on defaulted loans that remains after the Secretary's share of collections has been paid and the complement of the reinsurance percentage has been deposited into the Federal Fund;
(7) The agency's share of the payoff amounts received from the consolidation or rehabilitation of defaulted loans; and
(8) Other receipts as authorized by the Secretary.
(c)
(1) Guaranty agency-related activities, including—
(i) Application processing;
(ii) Loan disbursement;
(iii) Enrollment and repayment status management;
(iv) Default aversion activities;
(v) Default collection activities;
(vi) School and lender training;
(vii) Financial aid awareness and related outreach activities; and
(viii) Compliance monitoring; and
(2) Other student financial aid-related activities for the benefit of students, as selected by the guaranty agency.
(a) The Secretary may guarantee all—
(1) FISL, Federal SLS, and Federal PLUS loans made by lenders located in a State in which no State or private nonprofit guaranty agency has in effect an agreement with the Secretary under § 682.401 to serve as guarantor in that State;
(2) Federal Consolidation loans made by the Student Loan Marketing Association and Federal Consolidation loans made by any other lender that has applied for and been denied guarantee coverage on Consolidation loans by the guaranty agency that guarantees the largest dollar volume of FFEL loans made by the lender; and
(3) FISL, Federal SLS, Federal PLUS, and Federal Consolidation loans made by lenders located in a State in which a guaranty agency program is operating but is not reasonably accessible to students who meet the agency's residency requirements.
(b) The Secretary may guarantee FISL, Federal SLS, Federal PLUS and Federal Consolidation loans made by a lender located in a State where a guaranty agency operates a program that is reasonably accessible to students who meet the residency requirements of that program only for—
(1) A student who does not meet the agency's residency requirements;
(2) A lender who is not able to obtain a guarantee from the guaranty agency for at least 80 percent of the loans the lender intends to make over a 12-month period because of the agency's residency requirements;
(3) With the approval of the guaranty agency, a student who has previously received from the same lender a FISL loan that has not been repaid; or
(4) All students at a school located in the State if the Secretary finds that—
(i) No single guaranty agency program is reasonably accessible to students at that school as compared to students at other schools during a comparable period of time; and
(ii) Guaranteeing loans made in the State to students attending that school would significantly increase the access of students at that school to FFEL Program loans. The Secretary may guarantee loans made to those students by a lender in that State if—
(A) The guaranty agency does not recognize the school as being eligible, but the school is eligible under the FISL program; or
(B) A majority of the persons enrolled at the school meet the conditions of student eligibility for FISL loans but are not recognized as eligible under the guaranty agency program.
(c) For purposes of paragraph (b) of this section, a lender is considered to be located in the same State as a school if the lender—
(1) Has an origination relationship with the school;
(2) Has a majority of its voting stock held by the school; or
(3) Has common ownership or management with the school and more than 50 percent of the loans made by that lender are made to students at that school.
(d) As a condition for guaranteeing loans under the Federal FFEL programs, the Secretary may require the
(e) With regard to a school lender that has entered into an agreement with the Secretary under § 682.600, the Secretary denies loan guarantees on the basis of this section only if the Secretary first determines that all eligible students at that school who make a conscientious effort to obtain a loan from another lender will find a loan to be reasonably available. For purposes of this paragraph, the determination of loan availability is based on studies and surveys that the Secretary considers satisfactory.
(a)
(b)
(i) If the total of default claims under the Federal GSL programs paid by the Secretary to a State lender during any fiscal year reaches five percent of the amount of the Federal GSL loans in repayment at the end of the preceding fiscal year, the Secretary's guarantee liability on a claim subsequently paid during that fiscal year is 90 percent of the amount of the unpaid principal balance plus accrued interest.
(ii) If the total of default claims under the Federal GSL programs paid by the Secretary to a State lender during any fiscal year reaches nine percent of the amount of the Federal GSL loans in repayment at the end of the preceding fiscal year, the Secretary's guarantee liability on a claim subsequently paid during that fiscal year is 80 percent of the amount of the unpaid principal balance plus accrued interest.
(iii) For purposes of this paragraph, the total default claims paid by the Secretary during any fiscal year do not include paid claims filed by the lender under the provisions of § 682.412(e) or § 682.509.
(2) The potential reduction in guarantee liability does not apply to a State lender during the first Federal fiscal year of its operation as a Federal GSL Program lender and during each of the four succeeding fiscal years.
(3) For the purposes of this section, the term “amount of the Federal GSL loans in repayment” means the original principal amount of all loans guaranteed by the Secretary less—
(i) The original principal amount of loans on which—
(A) Under the FISL program, the borrower has not yet reached the repayment period;
(B) Payment in full has been made by the borrower;
(C) The borrower was in deferment status at the time repayment of principal was scheduled to begin and remains in deferment status; or
(D) The Secretary has paid a claim filed under section 437 of the Act; and
(ii) The amount paid by the Secretary for default claims on loans, exclusive of paid claims filed by the lender under § 682.412(e) or § 682.509.
(4) For the purposes of this paragraph, payments by the Secretary on a loan that the original lender assigned to a subsequent holder are considered payments made to the original lender.
(5) State lenders shall consolidate Federal GSL loans for the purpose of calculating the amount of the Secretary's guarantee liability under this section.
(a) To be considered for participation in the Federal GSL programs, a lender shall submit an application to the Secretary.
(b) In determining whether to enter into a guarantee agreement with an applicant, and, if so, what the terms of the agreement will be, the Secretary considers—
(1) Whether the applicant meets the definition of an “eligible lender” in
(2) Whether the applicant is capable of complying with the regulations in this part as they apply to lenders;
(3) Whether the applicant is capable of implementing adequate procedures for making, servicing, and collecting loans;
(4) Whether the applicant has had prior experience with a similar Federal, State, or private nonprofit student loan program, and the amount and percentage of loans that are currently delinquent or in default under that program;
(5) The financial resources of the applicant; and
(6) In the case of a school that is seeking approval as a lender, its accreditation status.
(c) The Secretary may require an applicant to submit sufficient materials with its application so that the Secretary may fairly evaluate it in accordance with the criteria in this section.
(d)(1) If the Secretary decides not to approve the application for a guarantee agreement, the Secretary's response includes the reason for the decision.
(2) The Secretary provides the lender an opportunity for the lender to meet with a designated Department official if the lender wishes to appeal the Secretary's decision.
(3) However, the Secretary need not explain the reasons for the denial or grant the lender an opportunity to appeal if the lender submits its application within six months of a previous denial.
(a)(1) To participate in the Federal GSL programs, a lender must have a guarantee agreement with the Secretary. The Secretary does not guarantee a loan unless it is covered by such an agreement.
(2) In general, under a guarantee agreement the lender agrees to comply with all laws, regulations, and other requirements applicable to its participation as a lender in the Federal GSL programs. In return, the Secretary agrees to guarantee each eligible Federal GSL loan held by the lender against the borrower's default, death, total and permanent disability, or bankruptcy.
(3) The Secretary may include in an agreement a limit on the duration of the agreement and the number or amount of Federal GSL loans the lender may make or hold.
(b)(1) Except as otherwise approved by the Secretary, a guarantee agreement with a school lender limits the Federal GSL loans made by that school lender that will be covered by the Federal guarantee to those loans made to students, or to parents borrowing on behalf of students, who are—
(i) In attendance at that school;
(ii) In attendance at other schools under the same ownership as that school; or
(iii) Employees or dependents of employees, or whose parents are employees, of that school lender or other schools under the same ownership, under circumstances the Secretary considers appropriate for loan guarantees.
(2) The Secretary may on a school-by-school basis impose limits under paragraph (b)(1)(iii) of this section on a school lender that makes loans to students or to parents of students in attendance at other schools under the same ownership, or to employees, or to dependents or parents of employees, of those other schools.
(a) A lender having a guarantee agreement shall submit an application to the Secretary for a Federal loan guarantee on each intended loan that the lender determines to be eligible for a guarantee. The application must be on a form prescribed by the Secretary. The Secretary notifies the lender whether the loan will be guaranteed and of the amount of the guarantee. No disbursement on a loan made prior to the Secretary's approval of that loan is covered by the guarantee.
(b) The Secretary issues a guarantee on a Federal GSL loan in reliance on the implied representations of the lender that all requirements for the
(a)
(b)
(i) Counting the number of months beginning with the month following the month in which each disbursement on the loan is to be made and ending 12 months after the borrower's anticipated graduation from the school for attendance at which the loan is sought;
(ii) Dividing one-fourth of one percent of the principal amount of the loan by 12; and
(iii) Multiplying the result obtained in paragraph (c)(1)(i) of this section by that obtained in paragraph (c)(1)(ii) of this section.
(2) If the lender disburses the loan in multiple installments, the insurance premium is calculated for each disbursement from the month following the month that the disbursement is made.
(d)
(1) Using the projected repayment period as a base;
(2) Amortizing the loan in equal monthly installments over the repayment period;
(3) Determining one-fourth of one percent of each monthly declining principal balance; and
(4) Computing the total of monthly amounts calculated under paragraph (d)(3) of this section.
(e)
(2) The Secretary's guarantee on a loan ceases to be effective if the lender fails to pay the insurance premium within 60 days of the date payment is due. However, the Secretary may excuse late payment of an insurance premium and reinstate the guarantee coverage on a loan if the Secretary is satisfied that at the time the premium is paid—
(i) The loan is not in default and the borrower is not delinquent in making installment payments; or
(ii) The loan is in default, or the borrower is delinquent, under circumstances where the borrower has entered the repayment period without the lender's knowledge.
(g)
(a) The Secretary does not guarantee a FISL, Federal SLS, or Federal PLUS loan in an amount that would—
(1) Result in an annual loan amount in excess of the student's estimated
(i) The student's estimated financial assistance; and
(ii) The student's expected family contribution for that period, in the case of a FISL loan; or
(2) Result in an annual or aggregate loan amount in excess of the permissible annual and aggregate loan limits described in § 682.204.
(b) The Secretary does not guarantee a Federal Consolidation loan in an amount greater than that required to discharge loans eligible for consolidation under § 682.100(a)(4).
(a)
(2) If two borrowers are liable for repayment of a Federal PLUS or Federal Consolidation loan as co-makers, the lender must follow these procedures with respect to both borrowers.
(3) For purposes of this section, the borrower's delinquency begins on the day after the due date of an installment payment not paid when due, except that if the borrower entered the repayment period without the lender's knowledge, the delinquency begins 30 days after the day the lender receives notice that the borrower has entered the repayment period.
(4) In lieu of the procedures described in this section, a lender may use the due diligence procedures in § 682.411 in collecting a Federal GSL loan.
(b)
(1) At last six more times at regular intervals during the remainder of the six-month period that started on the date of delinquency for loans repayable in monthly installments; or
(2) At least eight more times during the remainder of the eight-month period that started on the date of delinquency for loans repayable in installments less frequent than monthly.
(c)
(2) If the lender does not know the borrower's address when a borrower is first delinquent in making a payment, but subsequently obtains the borrower's address prior to the date on which the loan goes into default, the lender shall attempt to contact the borrower in accordance with paragraph (b) of this section, with the first contact occurring within 15 days of the date the lender obtained knowledge of the borrower's address, and shall attempt to contact the borrower at least once during each succeeding 30-day period until default.
(d)
(e)
(f)
(2) Prior to bringing suit the lender shall—
(i) Obtain the Secretary's approval; and
(ii) Notify the borrower or endorser in writing that it has received the Secretary's approval to bring suit on the loan, and that unless the borrower or endorser makes payments sufficient to bring the account out of default the lender will seek a judgment under which the borrower or endorser will be liable for payment of late charges, attorneys’ fees, collection agency charges, court costs, and other reasonable collection costs in addition to the unpaid principal and interest on the loan. The lender shall mail the notice to the borrower or endorser by certified mail, return receipt requested.
(3) The lender may bring suit if the borrower or endorser does not make payments sufficient to bring the account out of default within 10 days following the date of delivery of the notice described in paragraph (f)(2)(ii) of this section to the borrower or endorser indicated on the receipt.
(4) A lender may first apply the proceeds of any judgment against its attorneys’ fees, court costs, collection agency charges, and other reasonable collection costs, whether or not the judgment provides for these fees and costs.
(a)
(b)(1)
(i) The assignment;
(ii) The identity of the assignee;
(iii) The name and address of the party to whom subsequent payments must be sent; and
(iv) The telephone numbers of both the assignor and the assignee.
(2) The assignor and assignee shall provide the notice required by paragraph (b)(1) of this section separately. Each notice must indicate that a corresponding notice will be sent by the other party to the assignment.
(c)
(d)
(2) The warranty may cover only reductions that are attributable to an act or failure to act of the seller or other previous holder.
(3) The warranty may not cover matters the buyer is responsible for under the regulations in this part.
(a) A lender shall cease collection activity on a loan and file a claim with
(1) In the case of a loan that was not made or originated by the school, the lender learns that while the student was enrolled at the school the school terminated its teaching activities for that student during the academic period covered by the loan; or
(2) The Secretary directs that the claim be filed.
(b) A lender may not as a result of a claim filed with the Secretary under this section report a borrower's loan as in default to any credit bureau or other third party.
(a) The procedures in § 682.402(a)-(d) for determining whether a borrower has died, become totally and permanently disabled, or filed a bankruptcy petition apply to the Federal GSL programs.
(b) For purposes of this section, references to the “guaranty agency” in § 682.402(d)(5) shall be understood to refer to the Secretary.
(a)
(i) The loan is in default, as defined in § 682.200.
(ii) Any of the conditions exist for filing a claim without collection efforts, as set forth in § 682.412(e)(2) or § 682.509.
(iii) The borrower has died, become totally and permanently disabled, or filed a bankruptcy petition, as determined by the lender in accordance with § 682.510.
(2) If a Federal PLUS loan was obtained by two eligible parents as co-makers, or a Federal Consolidation loan was obtained jointly by a married couple, the reason for filing a claim must hold true for both applicants, or each applicant must have satisfied a claimable criterion at the time of the request for discharge of the loan.
(3) A lender may file a claim against the Secretary's guarantee only on a form provided by the Secretary. The lender shall attach to the claim all documents required by the Secretary. If the lender fails to do so, the Secretary denies the claim.
(b)
(i) The original promissory note.
(ii) The loan application.
(iii) The repayment instrument.
(iv) A payment history, as described in § 682.414(a)(3)(ii)(I).
(v) A collection history, as described in § 682.414(a)(3)(ii)(J).
(vi) A copy of the final demand letter if required by § 682.507(e).
(vii) The original or a copy of all correspondence addressed to, from, or on behalf of the borrower that is relevant to the loan, whether that correspondence involved the original lender, a subsequent holder, or a servicing agent.
(viii) If applicable, evidence of the lender's requests to the Department for skip-tracing assistance under § 682.507(c) and for preclaims assistance under § 682.507(d).
(ix) Any additional documentation that the Secretary determines is relevant to a claim.
(2) The documentation requirements for death, total and permanent disability, or bankruptcy claims in § 682.402(g)(1) apply to the Federal GSL programs. For purposes of this section, references to the “guaranty agency” in § 682.402(e)(1) mean the Secretary.
(c)
(d)
(e)
(1)
(2)
(3)
(a)
(i) Prior to July 1, 1972, or from August 19, 1972 through February 28, 1973, the amount payable on a valid claim is equal to the unpaid balance of the original principal loan amount disbursed; or
(ii) From July 1 through August 18, 1972, or after February 28, 1973, the amount payable on a valid claim is equal to the unpaid balance of the principal and interest in accordance with paragraph (a)(2) of this section. The unpaid principal amount of the loan may include capitalized interest to the extent authorized by § 682.202(b).
(2)
(i) During the period before the claim is filed, not to exceed the period provided for in § 682.511(e) for filing the claim.
(ii) During a period not to exceed 30 days following the return of the claim to the lender by the Secretary for additional documentation necessary for the claim to be approved by the Secretary.
(iii) During the period, after the claim is filed, that is required by the Secretary to approve the claim and to authorize payment or to return the claim to the lender for additional documentation.
(3)
(b)
(i) Is equal to the unpaid balance of the original principal loan amount disbursed if the loan was disbursed prior to December 15, 1968; or
(ii) Is calculated in accordance with § 682.402(h)(2) and (h)(3) if the loan was disbursed after December 14, 1968.
(2) In the case of a bankruptcy claim, the amount of loss is calculated in accordance with § 682.402(f)(2) and (f)(3).
(3) For purposes of this section, references to the “guaranty agency” in § 682.402(f)(3) mean the Secretary.
(c)
(a)(1) In determining whether to approve for payment a claim against the Secretary's guarantee, the Secretary considers matters affecting the enforceability of the loan obligation and whether the loan was made and administered in accordance with the Act and applicable regulations.
(2) The Secretary deducts from a claim any amount that is not a legally enforceable obligation of the borrower, except to the extent that the defense of infancy applies.
(3) Except as provided in § 682.509, the Secretary does not pay a claim unless—
(i) All holders of the loan have complied with the requirements of this part, including, but not limited to, those concerning due diligence in the making, servicing, and collecting of a loan;
(ii) The current holder has complied with the deadlines for filing a claim established in § 682.511(e); and
(iii) The current holder complies with the requirements for submitting documents with a claim as established in § 682.511(b).
(b) Except as provided in § 682.509, the Secretary does not pay a death, disability, or bankruptcy claim for a loan after a default claim for that loan has been disapproved by the Secretary or if it would not be payable as a default claim by the Secretary.
(c) The Secretary's determination of the amount of loss payable on a default claim under this part, once final, is conclusive and binding on the lender that filed the claim.
A determination of the Secretary under this section is subject to judicial review under 5 U.S.C. 706 and 41 U.S.C. 321-322.
(a) The Secretary may waive the right to recover or refuse to make an interest benefits, special allowance, or claim payment, or may permit a lender to cure certain defects in a specified manner if, in the Secretary's judgment, the best interests of the United States so require.
(b) To receive payment on a default claim or to resume eligibility to receive interest benefits and special allowance on a loan as to which a lender has committed a violation of the requirements of this part regarding due diligence in collection or timely filing of claims, the lender shall meet the conditions described in appendix C to this part.
(a)
(2) A lender shall retain the records required for each loan for not less than five years following the date the loan is repaid in full by the borrower or the lender is reimbursed on a claim. However, in particular cases the Secretary may require the retention of records beyond this minimum period.
(3)(i) The lender may store the records specified in § 682.414(a)(3)(ii)(C)-(K) on microfilm, optical disk, or other machine readable format.
(ii) The holder of the promissory note shall retain the original note and repayment instrument until the loan is fully repaid. At that time the holder shall return the original note and repayment instrument to the borrower and retain copies for the prescribed period.
(iii) The lender shall retain the original or a copy of the loan application.
(b)
(c)
(1) Providing timely access for examination and copying to the records (including computerized records) required by applicable regulations and to any other pertinent books, documents, papers, computer programs, and records; and
(2) Providing reasonable access to lender personnel associated with the lender's administration of the Title IV, HEA programs for the purpose of obtaining relevant information. In providing reasonable access, the institution may not—
(i) Refuse to supply any relevant information;
(ii) Refuse to permit interviews with those personnel that do not include the presence of representatives of the lender's management; and
(iii) Refuse to permit personnel interviews with those personnel that are not recorded by the lender.
(a)
(1) The school shall employ full-time at least one person whose responsibilities are limited to the administration of financial aid programs for students attending the school;
(2) The school may not be a correspondence school;
(3) The school may not make or originate loans that would be outstanding to or on behalf of more than 50 percent of the undergraduates in attendance at that school on at least a half-time basis unless the Secretary waives this rule pursuant to paragraph (c) of this section;
(4) The school shall inform any undergraduate student who has not previously obtained a loan that was made or originated by the school and who seeks to obtain such a loan that he or she must first make a good faith effort to obtain a loan from a commercial lender;
(5)(i) The school may not make or originate a loan for an academic period to a student described in paragraph (a)(4) of this section until the student provides the school with evidence under paragraph (b) of this section of denial of a loan by a commercial lender for the same academic period.
(ii) In determining whether a school has complied with the requirement set paragraph (a)(5)(i) of this section, the Secretary may take into consideration any patterns reflected by the letters of denial or the students’ sworn statements referred to in paragraph (b) of this section that indicate that the school has not given sufficient counseling to students to seek loans from a commercial lender first. An example of an unacceptable pattern would be if all denials of loans to a school's students were made by a small number of lenders; and
(6) The school's cohort default rate as calculated under subpart M of 34 CFR part 668 may not exceed 15 percent; and
(7) Except for reasonable administrative expenses directly related to the FFEL Program, the school must use payments received under § 682.300 and § 682.302 for need-based grant programs for its students.
(b)
(i) A written statement from a commercial lender indicating that the lender denied the borrower a loan for that academic period; or
(ii) The borrower's sworn statement, indicating both the refusal of a loan by a commercial lender and the lender's refusal to provide a written statement of the denial.
(2) If the borrower's statement is used to establish the denial of a loan, the statement must include—
(i) The name and address of the lender that denied the loan;
(ii) The approximate date on which the loan was denied;
(iii) The name and telephone number of the official who communicated the denial to the borrower; and
(iv) The borrower's signature.
(3) If the school determines that the denial of a loan to an eligible borrower by a commercial lender is based upon the lender's refusal to lend more than a part of the amount requested by the borrower, the school may either—
(i) Make or originate a loan to the borrower for the entire amount; or
(ii) Supplement the loan that the commercial lender is willing to make with a second loan to the borrower.
(c)
(1) The extent to which the school provides and expects to continue providing educational opportunities to economically disadvantaged students, as measured by the percentage of those students enrolled at the school who—
(i) Are in families that fall within the “low-income family” category used by the Bureau of the Census;
(ii) Would not be able to enroll or continue their enrollment at that school without Stafford or PLUS loans made or originated by the school; and
(iii) Would not be able to obtain a comparable education at another school;
(2) The extent to which the school offers educational programs that—
(i) Are unique in the geographical area the school serves; and
(ii) Would not be available to some students if the school adhered to the 50 percent lending limit; and
(3) The quality of the school's—
(i) Management of student financial assistance programs; and
(ii) Conformance with sound business practices.
(a) A school shall certify that the information it provides in connection with a loan application about the borrower and, in the case of a parent borrower, the student for whom the loan is intended, is complete and accurate. Except as provided in 34 CFR part 668, subpart E, a school may rely in good faith upon statements made on the application by the student.
(b) The information to be provided by the school about the borrower making application for the loan pertains to—
(1) The borrower's eligibility for a loan, as determined in accordance with § 682.201 and § 682.204;
(2) For a subsidized Stafford loan, the student's eligibility for interest benefits as determined in accordance with § 682.301; and
(3) The schedule for disbursement of the loan proceeds, which must reflect the delivery of the loan proceeds as set forth in § 682.604(c).
(c) Except as provided in paragraph (e) of this section, in certifying a loan, a school must certify a loan for the lesser of the borrower's request or the loan limits determined under § 682.204.
(d) A school may not certify a Stafford or PLUS loan application, or combination of loan applications, for a loan amount that—
(1) The school has reason to know would result in the borrower exceeding the annual or maximum loan amounts in § 682.204; or
(2) Exceeds the student's estimated cost of attendance, less—
(i) The student's estimated financial assistance for that period; and
(ii) In the case of a Stafford loan that is eligible for interest benefits, the borrower's expected family contribution for that period.
(e) A school may refuse to certify a Stafford or PLUS loan application or may reduce the borrower's determination of need for the loan if the reason for that action is documented and provided to the student in writing, provided—
(1) The determination is made on a case-by-case basis;
(2) The documentation supporting the determination is retained in the student's file; and
(3) The school does not engage in any pattern or practice that results in a denial of a borrower's access to FFEL loans because of the borrower's race, sex, color, religion, national origin, age, handicapped status, income, or selection of a particular lender or guaranty agency.
(f)(1) The minimum period of enrollment for which a school may certify a loan application is—
(i) At a school that measures academic progress in credit hours and uses a semester, trimester, or quarter system, a single academic term (e.g., a semester or quarter); or
(ii) At a school that measures academic progress in clock hours, or measures academic progress in credit hours but does not use a semester, trimester, or quarter system, the lesser of—
(A) The length of the student's program at the school; or
(B) The academic year as defined by the school in accordance with 34 CFR 668.3.
(2) The maximum period for which a school may certify a loan application is—
(i) Generally an academic year, as defined by 34 CFR 668.3, except that a guaranty agency may allow a school to use a longer period of time, not to exceed 12 months, corresponding to the period to which the agency applies the annual loan limits under § 682.401(b)(2)(ii); or
(ii) For a defaulted borrower who has regained eligibility under § 682.401(b)(4), the academic year in which the borrower regained eligibility.
(3) In certifying a Stafford or SLS loan amount in accordance with § 682.204—
(i) A program of study must be considered at least one full academic year if—
(A) The number of weeks of instruction time is at least 30 weeks; and
(B) The number of clock hours is at least 900, the number of semester or trimester hours is at least 24, or the number of quarter hours is at least 36.
(ii) A program of study must be considered two-thirds
(A) The number of weeks of instruction time is at least 20 weeks; and
(B) The number of clock hours is at least 600, the number of semester or trimester hours is at least 16, or the number of quarter hours is at least 24.
(iii) A program of study must be considered one-third
(A) The number of weeks of instruction time is at least 10 weeks; and
(B) The number of clock hours is at least 300, the number of semester or trimester hours is at least 8, or the number of quarter hours is at least 12.
(4) In prorating a loan amount for a student enrolled in a program of study with less than a full academic year remaining, the school need not recalculate the amount of the loan if the number of hours for which an eligible student is enrolled changes after the school certifies the loan.
(g)(1) A school must cease certifying loans based on the exceptions in § 682.604(c)(5)(i) and § 682.604(c)(10)(i) no later than—
(i) 30 days after the date the school receives notification from the Secretary of an FFEL cohort default rate, calculated under subpart M of 34 CFR part 668, that causes the school to no longer meet the qualifications outlined in those paragraphs; or
(ii) October 1, 2002.
(2) A school must cease certifying loans based on the exceptions in § 682.604(c)(5)(ii) and § 682.604(c)(10)(ii)
(h) A school may not assess the borrower, or the student in the case of a PLUS loan, a fee for the completion or certification of any FFEL Program form or information or for providing any information necessary for a student or parent to receive a loan under part B of the Act or any benefits associated with such a loan.
(i)
(a)
(2) Prior to a school delivering or crediting an FFEL loan account by EFT or master check, the school must provide the student or parent borrower with the notice as described under § 668.165.
(3) Except as provided in § 668.167, if the school is placed under the reimbursement payment method, a school shall not disburse a loan.
(b)
(2)(i) Except in the case of a late disbursement under paragraph (e) of this section or as provided in paragraph (b)(2)(iii) or (iv) of this section, a school may release the proceeds of any disbursement of a loan only to a student whom the school determines has maintained continuous eligibility in accordance with the provisions of § 682.201 for the loan period certified by the school on the student's loan application.
(ii) [Reserved]
(iii) If, after the proceeds of the first disbursement are transmitted to the student, the student becomes ineligible due solely to the school's loss of eligibility to participate in the Title IV programs, the school may transmit the proceeds of the second or subsequent disbursement to the borrower as permitted by § 668.26.
(iv) If, prior to the transmittal of the proceeds of a disbursement to the student, the student temporarily ceases to be enrolled on at least a half-time basis, the school may transmit the proceeds of that disbursement and any subsequent disbursement to the student if the school subsequently determines and documents in the student's file—
(A) That the student has resumed enrollment on at least a half-time basis;
(B) The student's revised cost of attendance; and
(C) That the student continues to qualify for the entire amount of the loan, notwithstanding any reduction in the student's cost of attendance caused by the student's temporary cessation of enrollment on at least a half-time basis.
(c)
(2)(i) Except as provided in § 682.207(b)(1)(v)(C)(
(ii) If the loan proceeds are disbursed by means of a check that requires the endorsement of both the borrower and the school, the school shall—
(A) In the case of the initial disbursement on a loan, endorse the check on its own behalf, and, after the student has registered, deliver it to the student subject to paragraph (d)(2) of this section, within 30 days of the school's receipt of the check; or
(B) Obtain the borrower's endorsement on the check, endorse the check on its own behalf and, after the student has registered, credit the student's account, in accordance with paragraph (d)(1) of this section, and deliver the remaining loan proceeds to the student, as specified in § 668.164(e).
(3) If the loan proceeds are disbursed by electronic funds transfer to an account of the school in accordance with § 682.207(b)(1)(ii)(B), or by master check in accordance with § 682.207(b)(1)(ii)(C), the school must, unless authorization was provided in the loan application or MPN, obtain the student's, or in the case of a PLUS loan, the parent borrower's written authorization for the release of the initial and any subsequent disbursement of each FFEL loan to be made, and after the student has registered either—
(i) Deliver the proceeds to the student or parent borrower as specified in § 668.164; or
(ii) Credit the student's account in accordance with paragraph (d)(1) of this section and § 668.164, notify the student or parent borrower in writing that it has so credited that account, and deliver to the student or parent borrower the remaining loan proceeds not later than the timeframe specified in 668.164.
(4) A school may not credit a student's account or release the proceeds of a loan to a student who is on a leave of absence, as described in § 668.22(d).
(5) A school may not release the first installment of a Stafford loan for endorsement to a student who is enrolled in the first year of an undergraduate program of study and who has not previously received a Stafford, SLS, Direct Subsidized, or Direct Unsubsidized loan until 30 days after the first day of the student's program of study unless—
(i) The school in which the student is enrolled has a cohort default rate, calculated under subpart M of 34 CFR part 668, of less than 10 percent for each of the three most recent fiscal years for which data are available;
(ii) The school is an eligible home institution certifying a loan to cover the student's cost of attendance in a study abroad program and has a cohort default rate, calculated under subpart M of 34 CFR part 668, of less than 5 percent for the single most recent fiscal year for which data are available; or
(iii) The school is not in a State.
(6) Unless the provision of § 682.207(d) or the provisions of paragraph (c)(7) of this section apply—
(i) If a loan period is more than one payment period, the school must deliver loan proceeds at least once in each payment period; and
(ii) If a loan period is one payment period, the school must make at least two deliveries of loan proceeds during that payment period. The school may not make the second delivery until the calendar midpoint between the first and last scheduled days of class of the loan period.
(7)(i) If a school measures academic progress in an educational program in credit hours and either does not use terms or does not use terms that are substantially equal in length for a loan period, the school may not deliver a second disbursement until the later of—
(A) The calendar midpoint between the first and last scheduled days of class of the loan period; or
(B) The date, as determined by the school, that the student has completed half of the academic coursework in the loan period.
(ii) For purposes of paragraph (c)(7) of this section, terms in a loan period are substantially equal in length if no term in the loan period is more than two weeks longer than any other term in that loan period.
(8) If an educational program measures academic progress in clock hours,
(i) The calendar midpoint between the first and last scheduled days of class of the loan period; or
(ii) The date, as determined by the school, that the student has completed half of the clock hours in the loan period.
(9) The school must deliver loan proceeds in substantially equal installments, and no installment may exceed one-half of the loan.
(10) Notwithstanding the requirements of paragraphs (c)(6)-(c)(9) of this section, a school is not required to deliver loan proceeds in more than one installment if—
(i)(A) The student's loan period is not more than one semester, one trimester, one quarter, or, for non term-based schools or schools with non-standard terms, 4 months; and
(B) The school in which the student is enrolled has a cohort default rate, calculated under subpart M of 34 CFR part 668, of less than 10 percent for each of the three most recent fiscal years for which data are available;
(ii) The school is an eligible home institution certifying a loan to cover the student's cost of attendance in a study abroad program and has a cohort default rate, calculated under subpart M of 34 CFR part 668, of less than 5 percent for the single most recent fiscal year for which data are available; or
(iii) The school is not in a State.
(11) A school may deliver loan proceeds in accordance with paragraphs (c)(5) and (c)(10) of this section, if the school certified the loan prior to the deadline as provided for in § 682.603(g).
(d)
(ii)(A) The school may credit a registered student's account with only those loan proceeds covering costs specified in § 668.164.
(B) The school, as a fiduciary for the benefit of the guaranty agency, the Secretary, and the student, may hold any additional loan proceeds that the student requests in writing that the school retain in order to assist the student in managing his or her loan funds for the remainder of the academic year. The school shall maintain these funds, as provided in § 668.165(b)(5).
(2) For purposes of paragraphs (c)(2)(i), (c)(2)(ii) and (c)(3) of this section, a school may not deliver loan proceeds earlier than the timeframe specified in § 668.164.
(3) If a student does not register for the period of enrollment for which the loan was made, or a registered student withdraws or is expelled prior to the first day of classes of the period of enrollment for which the loan is made, the school shall return the proceeds to the lender no later than the period specified in § 668.167.
(4) If the school is unable for any other reason to document that a registered student attended school during the period of enrollment for which the loan is made, the school must determine the student's withdrawal date as required under § 682.605, and by the deadline described under § 682.605, within 30 days of the period described in § 682.607(c) shall notify the lender of the student's withdrawal, expulsion, or failure to attend school, if applicable, and return to the lender—
(i) Any loan proceeds credited directly by the school to the student's account; and
(ii) The amount of payments made directly by the student to the school, to the extent that they do not exceed the amount of any loan proceeds delivered by the school to the student.
(e)
(2) If the total amount of the late disbursement and all prior disbursements is greater than that portion of the borrower's educational charges, the school shall return the balance of the borrower's loan proceeds to the lender with a notice certifying—
(i) The beginning and ending dates of the period during which the borrower was enrolled at the school as an eligible student during the loan period or payment period; and
(ii) The borrower's corrected financial need for the loan for that period of enrollment or payment period.
(f)
(2) The initial counseling must—
(i) Explain the use of a Master Promissory Note;
(ii) Emphasize to the student borrower the seriousness and importance of the repayment obligation the student borrower is assuming;
(iii) Describe the likely consequences of default, including adverse credit reports, Federal offset, and litigation;
(iv) In the case of a student borrower of a Stafford loan (other than a loan made or originated by the school), emphasize that the student borrower is obligated to repay the full amount of the loan even if the student borrower does not complete the program, is unable to obtain employment upon completion, or is otherwise dissatisfied with or does not receive the educational or other services that the student borrower purchased from the school; and
(v) Inform the student borrower of sample monthly repayment amounts based on a range of student levels of indebtedness or on the average indebtedness of Stafford loan borrowers at the same school or in the same program of study at the same school.
(3) If initial counseling is conducted through interactive electronic means, the school must take reasonable steps to ensure that each student borrower receives the counseling materials, and participates in and completes the initial counseling.
(4) A school must maintain documentation substantiating the school's compliance with this section for each student borrower.
(g)
(2) The exit counseling must—
(i) Inform the student borrower of the average anticipated monthly repayment amount based on the student borrower's indebtedness or on the average indebtedness of student borrowers who have obtained Stafford or SLS loans for attendance at the same school or in the same program of study at the same school;
(ii) Review for the student borrower available repayment options, including standard, graduated, extended, and income-sensitive repayment plans and loan consolidation;
(iii) Suggest to the student borrower debt-management strategies that would facilitate repayment;
(iv) Include the matters described in paragraph (f)(2) of this section;
(v) Review for the student borrower the conditions under which the student borrower may defer or forbear repayment or obtain a full or partial discharge of a loan;
(vi) Require the student borrower to provide current information concerning name, address, social security number, references, and driver's license number and State of issuance, as well as the student borrower's expected permanent address, the address of the student borrower's next of kin, and the name and address of the student borrower's expected employer (if known). The school must ensure that this information is provided to the guaranty agency or agencies listed in the student borrower's records within 60 days after the student borrower provides the information;
(vii) Review for the student borrower information on the availability of the Student Loan Ombudsman's office; and
(viii) Inform the student borrower of the availability of title IV loan information in the National Student Loan Data System (NSLDS).
(3) If exit counseling is conducted by electronic interactive means, the school must take reasonable steps to ensure that each student borrower receives the counseling materials, and participates in and completes the counseling.
(4) The school must maintain documentation substantiating the school's compliance with this section for each student borrower.
(h)
(1) Using the student's SLS, PLUS, nonsubsidized or unsubsidized Stafford, or State-sponsored or private loan to cover the expected family contribution, if not already done;
(2)(i) Returning the entire undelivered disbursement to the lender or escrow agent; and
(ii) Providing the lender with a written statement—
(A) Describing the reason for the return of the funds, if any;
(B) Setting forth the student's revised financial need; and
(C) Directing the lender to re-disburse a revised amount and, if necessary, revise subsequent disbursements to eliminate the overaward; or
(3) Returning to the lender any portion of the disbursement for which the student is ineligible and providing the lender with a written statement explaining the return of the funds.
(i) For purposes of paragraph (h) of this section, funds obtained from any Federal College Work-Study employment that do not exceed the borrower's financial need by more than $300 may not be considered as excess loan proceeds.
(a) Except in the case of a student who does not return for the next scheduled term following a summer break, which includes any summer term or terms in which classes are offered but students are not generally required to attend, a school must follow the procedures in § 668.22(b) or (c), as applicable, for determining the student's date of withdrawal. In the case of a student who does not return from a summer break, the school must follow the procedures in § 668.22(b) or (c), as applicable, except that the school shall determine the student's withdrawal date no
(b) The school must use the withdrawal date determined under § 668.22(b) or (c), as applicable for the purpose of reporting to the lender the date that the student has withdrawn from the school.
(c) For the purpose of a school's reporting to a lender, a student's withdrawal date is the month, day and year of the withdrawal date.
(a)
(1) Must pay that portion of the student's refund or return of title IV, HEA program funds that is allocable to a FFEL loan to—
(i) The original lender; or
(ii) A subsequent holder, if the loan has been transferred and the school knows the new holder's identity; and
(2) Must provide simultaneous written notice to the borrower if the school makes a payment of a refund or a return of title IV, HEA program funds to a lender on behalf of that student.
(b)
(c)
(a)
(b)
(i) The original principal amount of all loans the school has ever made that went into default during that period.
(ii) The original principal amount of all loans the school has ever made, including loans in deferment status that—
(A) Were in repayment status at the beginning of that period; or
(B) Entered repayment status during that period.
(2) In making the determination under this section, the Secretary considers the status of all FFEL loans made by the school whether the loans are held by the school or by a subsequent holder.
(c)
(1) Termination is not justified in light of recent improvements the school has made in its collection capabilities that will reduce the school's loan default rate significantly within the next year. Examples of these improvements include—
(i) Adopting more efficient collection procedures; or
(ii) Employing increased collection staff; or
(2) Termination would cause a substantial hardship to the school's current or prospective students or their parents based on—
(i) The extent to which the school provides, and expects to continue to provide educational opportunities to economically disadvantaged students as measured by the percentage of students enrolled at the school who—
(A) Are in families that fall within the “low-income family” category used by the Bureau of the Census;
(B) Would not be able to enroll or continue their enrollment at that school without a loan from the school; and
(C) Would not be able to obtain a comparable education at another school;
(ii) The extent to which the school offers educational programs that—
(A) Are unique in the geographical area that the school serves; and
(B) Would not be available to some students if they or their parents could not obtain loans from the school; and
(iii) The quality of improvements the school has made in its—
(A) Management of student financial assistance programs; and
(B) Conformance with sound business practices.
(d)
(2) The Secretary or his designee begins a termination action by sending a notice to the school. The notice is sent by certified mail with return receipt requested. The notice—
(i) Informs the school of the intent to terminate the school's lending eligibility because of the school's default experience;
(ii) Specifies the proposed date the termination becomes effective; and
(iii) Informs the school that it has 15 days to—
(A) Submit any written material it wants considered in determining whether its lending eligibility should be terminated under paragraphs (a) and (b) of this section, including written material in support of a hardship exception under paragraph (c) of this section; or
(B) Request an oral hearing to show why the school's lending eligibility should not be terminated.
(3) If the school does not request an oral hearing but submits written material, the Secretary or the designated official considers that material and notifies the school as to whether the termination action will be taken.
(4) The Secretary or the designated official (presiding officer) schedules the date and place of a hearing for a school that has requested an oral hearing. The date of the hearing is at least 15 days from the date of receipt of the request. A presiding officer—
(i) Conducts the hearing;
(ii) Considers all written material presented before the hearing and any other material presented during the hearing; and
(iii) Determines if termination of the school's lending eligibility is warranted.
(5) The decision of the designated official is subject to review by the Secretary.
(e)
(1) Make further loans under this part until it has entered into a new guarantee agreement with the Secretary; or
(2) Enter into a new guarantee agreement with the Secretary until at least one year after the school's lending eligibility has been terminated under this section.
(f)
(1) Treating all of the schools as one school; or
(2) Treating each school on an individual basis.
(a) The Secretary may require a school to repay funds paid to other program participants by the Secretary. The Secretary also may require a school to purchase from the holder of a FFEL loan that portion of the loan that is unenforceable, that the borrower was ineligible to receive, or for which the borrower was ineligible to receive interest benefits contrary to the school's certification, and to make arrangements acceptable to the Secretary for reimbursement of the amounts the Secretary will be obligated to pay to program participants respecting that loan in the future. The repayment of funds and purchase of loans may be required if the Secretary determines that the payment to program participants, the unenforceability of the loan, or the disbursement of loan amounts for which the borrower was ineligible or for which the borrower was ineligible for interest benefits, resulted in whole or in part from—
(1) The school's violation of a Federal statute or regulation; or
(2) The school's negligent or willful false certification.
(b) In requiring a school to repay funds to the Secretary or to another party or to purchase loans from a holder in connection with an audit or program review, the Secretary follows the procedures described in 34 CFR part 668, subpart H.
(c) Notwithstanding paragraph (a) of this section, the Secretary may waive the right to require repayment of funds or repurchase of loans by a school if, in the Secretary's judgment, the best interest of the United States so requires.
(d) The Secretary may impose a fine or take an emergency action against a school or limit, suspend, or terminate a school's participation in the FFEL programs, in accordance with 34 CFR part 668, subpart G.
(e) A school shall comply with any emergency action, limitation, suspension, or termination imposed by a guaranty agency in accordance with the agency's standards and procedures. A school shall repay funds to the Secretary or other party or purchase loans from a holder if a guaranty agency determines that the school improperly received or retained the funds in violation of a Federal law or regulation or a guaranty agency rule or regulation.
(a)
(1) Establish and maintain proper administrative and fiscal procedures and all necessary records as set forth in the regulations in this part and in 34 CFR part 668;
(2) Follow the record retention and examination provisions in this part and in 34 CFR 668.24; and
(3) Submit all reports required by this part and 34 CFR part 668 to the Secretary.
(b)
(1) A copy of the loan certification or data electronically submitted to the lender, that includes the amount of the loan and the period of enrollment for which the loan was intended;
(2) The cost of attendance, estimated financial assistance, and estimated family contribution used to calculate the loan amount;
(3) For loans delivered to the school by check, the date the school endorsed each loan check, if required;
(4) The date or dates of delivery of the loan proceeds by the school to the student or to the parent borrower;
(5) For loans delivered by electronic funds transfer or master check, a copy of the borrower's written authorization required under § 682.604(c)(3), if applicable, to deliver the initial and subsequent disbursements of each FFEL program loan; and
(6) Documentation of any MPN confirmation process or processes the school may have used.
(c)
(1) Upon receipt of a student status confirmation report form from the Secretary or a similar student status confirmation report form from any guaranty agency, complete and return that report within 30 days of receipt to the
(2) Unless it expects to submit its next student status confirmation report to the Secretary or the guaranty agency within the next 60 days, notify the guaranty agency or lender within 30 days—
(i) If it discovers that a Stafford, SLS, or PLUS loan has been made to or on behalf of a student who enrolled at that school, but who has ceased to be enrolled on at least a half-time basis;
(ii) If it discovers that a Stafford, SLS, or PLUS loan has been made to or on behalf of a student who has been accepted for enrollment at that school, but who failed to enroll on at least a half-time basis for the period for which the loan was intended;
(iii) If it discovers that a Stafford, SLS, or PLUS loan has been made to or on behalf of a full-time student who has ceased to be enrolled on a full-time basis; or
(iv) If it discovers that a student who is enrolled and who has received a Stafford or SLS loan has changed his or her permanent address.
A foreign school is required to comply with the provisions of this part, except to the extent that the Secretary states in this part or in other official publications or documents that those schools need not comply with those provisions.
(a) This subpart governs the limitation, suspension, or termination by the Secretary of the eligibility of an otherwise eligible lender to participate in the FFEL programs or the eligibility of a third-party servicer to enter into a contract with an eligible lender to administer any aspect of the lender's FFEL programs. The regulations in this subpart apply to a lender or third-party servicer that violates any statutory provision governing the FFEL programs or any regulations, special arrangements, agreements, or limitations entered into under the authority of statutes applicable to Title IV of the HEA prescribed under the FFEL programs. These regulations apply to lenders that participate only in a guaranty agency program, lenders that participate in the FFEL programs, and third-party servicers that administer aspects of a lender's FFELP portfolio. These regulations also govern the Secretary's disqualification of a lender or school from participation in the FFEL programs under section 432(h)(2) and (h)(3) of the Act.
(b) This subpart does not apply—
(1)(i) To a determination that an organization fails to meet the definition of “eligible lender” in section 435(d)(1) of the Act or the definition of “lender” in § 682.200, for any reason other than a violation of the prohibitions in section 435(d)(5) of the Act; or
(ii) To a determination that an organization fails to meet the standards in § 682.416;
(2) To a school's loss of lending eligibility under § 682.608; or
(3) To an administrative action by the Department of Education based on any alleged violation of—
(i) The Family Educational Rights and Privacy Act of 1974 (section 438 of the General Education Provisions Act), which is governed by 34 CFR part 99;
(ii) Title VI of the Civil Rights Act of 1964, which is governed by 34 CFR parts 100 and 101;
(iii) Section 504 of the Rehabilitation Act of 1973 (relating to discrimination on the basis of handicap), which is governed by 34 CFR part 104; or
(iv) Title IX of the Education Amendments of 1972 (relating to sex discrimination), which is governed by 34 CFR part 106.
(c) This subpart does not supplant any rights or remedies that the Secretary may have against participating lenders or schools under other authorities.
The following definitions apply to terms used in this subpart:
(i) By a guaranty agency; or
(ii) By the Secretary, based on an action taken by the Secretary, or a designated Departmental official under § 682.706; or
(2) The removal of a third-party servicer's eligibility to contract with a lender or guaranty agency for an indefinite period of time by the Secretary based on an action taken by the Secretary, or a designated Departmental official under § 682.706.
(a) Limitation, suspension, or termination proceedings by the Secretary do not affect a lender's responsibilities or rights to benefits and claim payments that are based on the lender's prior participation in the program, except as provided in paragraph (d) of this section and in § 682.709.
(b) A limitation imposes on a lender—
(1) A limit on the number or total amount of loans that a lender may make, purchase, or hold under the FFEL programs;
(2) A limit on the number or total amount of loans a lender may make to, or on behalf of, students at a particular school under the FFEL programs; or
(3) Other reasonable requirements or conditions, including those described in § 682.709.
(c) A limitation imposes on a third-party servicer—
(1) A limit on the number of loans or accounts or total amount of loans that the servicer may service;
(2) A limit on the number of loans or accounts or total amount of loans that the servicer is administering under its contract with a lender or guaranty agency; or
(3) Other reasonable requirements or conditions, including those described in § 682.709.
(d) After the date the termination of a lender's eligibility becomes effective, the Secretary does not guarantee new loans made by that lender or pay interest benefits, special allowance, or reinsurance on new loans guaranteed by a guaranty agency after that date. The Secretary may also prohibit the lender from making further disbursements on a loan for which a guarantee commitment has already been issued.
(a) The Secretary may use the informal compliance procedure in paragraph (b) of this section if the Secretary receives a complaint or other reliable information indicating that a lender or third-party servicer may be in violation of applicable laws, regulations, special arrangements, agreements, or limitations entered into under the authority of statutes applicable to Title IV of the HEA.
(b) Under the informal compliance procedure, the Secretary gives the lender or servicer a reasonable opportunity to—
(1) Respond to the complaint or information; and
(2) Show that the violation has been corrected or submit an acceptable plan for correcting the violation and preventing its recurrence.
(c) The Secretary does not delay limitation, suspension, or termination procedures during the informal compliance procedure if—
(1) The delay would harm the FFEL programs; or
(2) The informal compliance procedure will not result in correction of the alleged violation.
(a) The Secretary, or a designated Departmental official, may take emergency action to stop the issuance of guarantee commitments by the Secretary and guarantee agencies and to withhold payment of interest benefits and special allowance to a lender if the Secretary—
(1) Receives reliable information that the lender or a third-party servicer with which the lender contracts is in violation of applicable laws, regulations, special arrangements, agreements, or limitations entered into under the authority of statutes applicable to Title IV of the HEA pertaining to the lender's portfolio of loans;
(2) Determines that immediate action is necessary to prevent the likelihood of substantial losses by the Federal Government, parent borrowers, or students; and
(3) Determines that the likelihood of loss exceeds the importance of following the procedures for limitation, suspension, or termination.
(b) The Secretary begins an emergency action by notifying the lender or third-party servicer, by certified mail, return receipt requested, of the action and the basis for the action.
(c) The action becomes effective on the date the notice is mailed to the lender or third-party servicer.
(d)(1) An emergency action does not exceed 30 days unless a limitation, suspension, or termination proceeding is begun before that time expires.
(2) If a limitation, suspension, or termination proceeding is begun before the expiration of the 30-day period—
(i) The emergency action may be extended until completion of the proceeding, including any appeal to the Secretary; and
(ii) Upon the written request of the lender or third-party servicer, the Secretary may provide the lender or servicer with an opportunity to demonstrate that the emergency action is unwarranted.
(a)
(i) The lender or servicer and the Secretary agree to an extension of the suspension period, if the lender or third-party servicer has not requested a hearing; or
(ii) The Secretary begins a limitation or a termination proceeding.
(2) If the Secretary begins a limitation or a termination proceeding before
(3) A suspension described in 34 CFR 85.201(c) lasts for a period of 60 days, beginning on the effective date specified in the notice by the Secretary under 34 CFR 85.201(b), except as provided in paragraph (a)(1)(i) or (ii) of this section.
(b)
(2) The notice—
(i) Informs the lender or servicer of the Secretary's intent to suspend the lender's or servicer's eligibility for a period not to exceed 60 days;
(ii) Describes the consequences of a suspension;
(iii) Identifies the alleged violations on which the proposed suspension is based;
(iv) States the proposed date the suspension becomes effective, which is at least 20 days after the date of mailing of the notice;
(v) Informs the lender or servicer that the suspension will not take effect on the proposed date, except as provided in paragraph (c)(9) of this section, if the Secretary receives at least five days prior to that date a request for an oral hearing or written material showing why the suspension should not take effect; and
(vi) Asks the lender or servicer to correct voluntarily any alleged violations.
(c)
(i) Dismisses the proposed suspension; or
(ii) Determines that the proposed suspension should be implemented and notifies the lender or servicer of the effective date of the suspension.
(2) If the lender or servicer requests an oral hearing within the time specified in paragraph (b)(2)(v) of this section, the Secretary schedules the date and place of the hearing. The date is at least 15 days after receipt of the request from the lender or servicer. No proposed suspension takes effect until a hearing is held.
(3) The oral hearing is conducted by a presiding officer who—
(i) Ensures that a written record of the hearing is made;
(ii) Considers relevant written material presented before the hearing and other relevant evidence presented during the hearing; and
(iii) Issues a decision based on findings of fact and conclusions of law that may suspend the lender's or servicer's eligibility only if the presiding officer is persuaded that the suspension is warranted by the evidence.
(4) The formal rules of evidence do not apply, and no discovery, as provided in the Federal Rules of Civil Procedure, (28 U.S.C. Appendix) is required.
(5) The presiding officer shall base findings of fact only on evidence considered at or before the hearing and matters given official notice.
(6) In a suspension action against a lender or third-party servicer based on a suspension under Executive Order 12549 or a proposed debarment under the Federal Acquisition Regulation (FAR), 48 CFR part 9, subpart 9.4, that does not meet the standards described in 34 CFR 85.201(c), the presiding official finds that the suspension or proposed debarment constitutes prima facie evidence that cause for suspension under this subpart exists.
(7) The initial decision of the presiding officer is mailed to the lender or servicer.
(8) The Secretary automatically reviews the initial decision of the presiding officer. The Secretary notifies the lender or servicer of the Secretary's decision by mail.
(9) A suspension takes effect on either a date that is at least 20 days after the date the notice of a decision imposing the suspension is mailed to the lender or servicer, or on the proposed effective date stated in the notice sent
(a)
(2) The notice—
(i) Informs the lender or servicer of the Secretary's intent to limit or terminate the lender's or servicer's eligibility;
(ii) Describes the consequences of a limitation or termination;
(iii) Identifies the alleged violations on which the proposed limitation or termination is based;
(iv) States the limits which may be imposed, in the case of a limitation proceeding;
(v) States the proposed date the limitation or termination becomes effective, which is at least 20 days after the date of mailing of the notice;
(vi) Informs the lender or servicer that the limitation or termination will not take effect on the proposed date if the Secretary receives, at least five days prior to that date, a request for an oral hearing or written material showing why the limitation or termination should not take effect;
(vii) Asks the lender or servicer to correct voluntarily any alleged violations; and
(viii) Notifies the lender or servicer that the Secretary may collect any amount owed by means of offset against amounts owed to the lender by the Department and other Federal agencies.
(b)
(i) Dismisses the proposed limitation or termination; or
(ii) Notifies the lender or servicer of the date the limitation or termination becomes effective.
(2) If the lender or servicer requests a hearing within the time specified in paragraph (a)(2)(vi) of this section, the Secretary schedules the date and place of the hearing. The date is at least 15 days after receipt of the request from the lender or servicer. No proposed limitation or termination takes effect until a hearing is held.
(3) The hearing is conducted by a presiding officer who—
(i) Ensures that a written record of the hearing is made;
(ii) Considers relevant written material presented before the hearing and other relevant evidence presented during the hearing; and
(iii) Issues an initial decision, based on findings of fact and conclusions of law, that may limit or terminate the lender's or servicer's eligibility if the presiding officer is persuaded that the limitation or termination is warranted by the evidence.
(4) The formal rules of evidence do not apply, and no discovery, as provided in the Federal Rules of Civil Procedure (28 U.S.C. appendix), is required.
(5) The presiding officer shall base findings of fact only on evidence presented at or before the hearing and matters given official notice.
(6) If a termination action is brought against a lender or third-party servicer and the presiding officer concludes that a limitation is more appropriate, the presiding officer may issue a decision imposing one or more limitations on a lender or third-party servicer rather than terminating the lender's or servicer's eligibility.
(7) In a termination action against a lender or third-party servicer based on a debarment under Executive Order 12549 or under the Federal Acquisition Regulation (FAR), 48 CFR part 9, subpart 9.4 that does not meet the standards described in 34 CFR 85.201(c), the presiding official finds that the debarment constitutes prima facie evidence that cause for debarment and termination under this subpart exists.
(8) The initial decision of the presiding officer is mailed to the lender or servicer.
(9) Any time schedule specified in this section may be shortened with the approval of the presiding officer and the consent of the lender or servicer and the Secretary or designated Departmental official.
(10) The presiding officer's initial decision automatically becomes the Secretary's final decision 20 days after it is issued and received by both parties unless the lender, servicer, or designated Departmental official appeals the decision to the Secretary within this period.
(c) Notwithstanding the other provisions of this section, if a lender or a lender's owner or officer or third-party servicer or servicer's owner or officer, respectively, is convicted of or pled
(a) If the lender, third-party servicer, or designated Departmental official appeals the initial decision of the presiding officer in accordance with § 682.706(b)(10)—
(1) An appeal is made to the Secretary by submitting to the Secretary and the opposing party within 15 days of the date of the appealing party's receipt of the presiding officer's decision, a brief or other written material explaining why the decision of the presiding officer should be overturned or modified; and
(2) The opposing party shall submit its brief or other written material to the Secretary and the appealing party within 15 days of its receipt of the brief or written material of the appealing party.
(b) The Secretary issues a final decision affirming, modifying, or reversing the initial decision, including a statement of the reasons for the Secretary's decision.
(c) Any party submitting material to the Secretary shall provide a copy to each party that participates in the hearing.
(d) If the presiding officer's initial decision would limit or terminate the lender's or servicer's eligibility, it does not take effect pending the appeal unless the Secretary determines that a stay of the date it becomes effective would seriously and adversely affect the FFEL programs or student or parent borrowers.
(a) All mailing dates and receipt dates referred to in this subpart must be substantiated by the original receipts from the U.S. Postal Service.
(b) If a lender or third-party servicer refuses to accept a notice mailed under this subpart, the Secretary considers the notice as being received on the date that the lender or servicer refuses to accept the notice.
(a) As part of a limitation or termination proceeding, the Secretary, or a designated Departmental official, may require a lender or third-party servicer to take reasonable corrective action to remedy a violation of applicable laws, regulations, special arrangements, agreements, or limitations entered into under the authority of statutes applicable to Title IV of the HEA.
(b) The corrective action may include payment to the Secretary or recipients designated by the Secretary of any funds, and any interest thereon, that the lender, or, in the case of a third-party servicer, the servicer or the lender that has a contract with a third-party servicer, improperly received, withheld, disbursed, or caused to be disbursed. A third-party servicer may be held liable up to the amounts specified in § 682.413(a)(2).
(c) If a final decision requires a lender, a lender that has a contract with a
(a) A lender or third-party servicer may request removal of a limitation imposed by the Secretary in accordance with the regulations in this subpart at any time more than 12 months after the date the limitation becomes effective.
(b) The request must be in writing and must show that the lender or servicer has corrected any violations on which the limitation was based.
(c) Within 60 days after receiving the request, the Secretary—
(1) Grants the request;
(2) Denies the request; or
(3) Grants the request subject to other limitations.
(d)(1) If the Secretary denies the request or establishes other limitations, the lender or servicer, upon request, is given an opportunity to show why all limitations should be removed.
(2) A lender or third-party servicer may continue to participate in the FFEL programs, subject to any limitation imposed by the Secretary under paragraph (c)(3) of this section, pending a decision by the Secretary on a request under paragraph (d)(1) of this section.
(a) A lender or third-party servicer whose eligibility has been terminated by the Secretary in accordance with the procedures of this subpart may request reinstatement of its eligibility after the later of—
(1) Eighteen months from the effective date of the termination; or
(2) The expiration of the period of debarment under Executive Order 12459 or the Federal Acquisition Regulation (FAR), 48 CFR part 9, subpart 9.4.
(b) The request must be in writing and must show that—
(1) The lender or servicer has corrected any violations on which the termination was based; and
(2) The lender or servicer meets all requirements for eligibility.
(c) A school lender whose eligibility as a participating school has been terminated under 34 CFR part 668 may not be considered for reinstatement as a lender until it is reinstated as a participating school. However, the school may request reinstatement as both a school and a lender at the same time.
(d) Within 60 days after receiving a request for reinstatement, the Secretary—
(1) Grants the request;
(2) Denies the request; or
(3) Grants the request subject to limitations.
(e)(1) If the Secretary denies the lender's or servicer's request or allows reinstatement subject to limitations, the lender or servicer, upon request, is given an opportunity to show why its eligibility should be reinstated and all limitations removed.
(2) A lender or third-party servicer whose eligibility to participate in the FFEL programs is reinstated subject to limitations imposed by the Secretary pursuant to paragraph (d)(3) of this section, may participate in those programs, subject to those limitations, pending a decision by the Secretary on a request under paragraph (e)(1) of this section.
(a) The Secretary reviews a limitation, suspension, or termination action taken by a guaranty agency against a lender participating in the FFEL programs to determine if national disqualification is appropriate. Upon completion of the Secretary's review, the Secretary notifies the guaranty agency and the lender of the Secretary's decision by mail.
(b) The Secretary disqualifies a lender from participation in the FFEL programs if—
(1) The lender waives review by the Secretary; or
(2) The Secretary conducts the review and determines that the limitation, suspension, or termination was imposed in accordance with section 428(b)(1)(U) of the Act.
(c)(1) Disqualification by the Secretary continues until the Secretary is satisfied that—
(i) The lender has corrected the failure that led to the limitation, suspension, or termination; and
(ii) There are reasonable assurances that the lender will comply with the requirements of the FFEL programs in the future.
(2) Revocation of disqualification by the Secretary does not remove any limitation, suspension, or termination imposed by the agency whose action resulted in the disqualification.
(d) A guaranty agency shall refer a limitation, suspension, or termination action that it takes against a lender to the Secretary within 30 days of its final decision to limit, suspend, or terminate the lender's eligibility to participate in the agency's program.
(e) The Secretary reviews an agency's limitation, suspension, or termination of a lender's eligibility only when the guaranty agency's action is final, e.g, the lender is not entitled to any further appeals within the guaranty agency. A subsequent court challenge to an agency's action does not by itself affect the timing of the Secretary's review.
(f) The guaranty agency's notice to the Secretary regarding a termination action must include a certified copy of the administrative record compiled by the agency with regard to the action. The record must include certified copies of the following documents:
(1) The guaranty agency's letter initiating the action.
(2) The lender's response.
(3) The transcript of the agency's hearing.
(4) The decision of the agency's hearing officer.
(5) The decision of the agency on appeal from the hearing officer's decision, if any.
(6) The regulations and written procedures of the agency under which the action was taken.
(7) The audit or lender review report or documented basis that led to the action.
(8) All other documents relevant to the action.
(g) The guaranty agency's referral notice to the Secretary regarding a limitation or suspension action must include—
(1) The documents described in paragraph (f) of this section; and
(2) Documents describing and substantiating the existence of one or more of the circumstances described in paragraph (j) of this section.
(h)(1) Within 60 days of the Secretary's receipt of a referral notice described in paragraph (f) or (g) of this section, the Secretary makes an initial assessment, based on the agency's record, as to whether the agency's action appears to comply with section 428(b)(1)(U) of the Act.
(2) In the case of a referral notice described in paragraph (g) of this section, the Secretary also determines whether one or more of the circumstances described in paragraph (j) of this section exist.
(3) If the Secretary concludes that the agency's action appears to comply with section 428(b)(1)(U) of the Act and, if applicable, one or more of the circumstances described in paragraph (j) of this section exist, the Secretary notifies the lender that the Secretary will review the guaranty agency's action to determine whether to disqualify the lender from further participation in the FFEL programs and affords the lender an opportunity—
(i) To waive the review and be disqualified immediately; or
(ii) To request a review.
(i) The Secretary's review of the guaranty agency's action is limited to whether the agency action was taken in accordance with procedures that were substantially the same as procedures applicable to the limitation, suspension, or termination of eligibility of a lender under the FISL Program (34 CFR part 682, subpart G).
(j) In the case of an action by an agency that limits or suspends a lender's eligibility to participate in the agency's program, the agency shall provide the Secretary with a referral as described in paragraph (g) of this section only if—
(1) The lender has not corrected the violation. A violation is corrected if, among other things, the lender has satisfied fully all liabilities incurred by the lender as a result of the violation, including its liability to the Secretary, or the lender has arranged to satisfy those liabilities in a manner acceptable to the parties to whom the liabilities are owed;
(2) The lender has not provided satisfactory assurances to the agency of future compliance with program requirements; or
(3) The guaranty agency determines that special circumstances warrant disqualification of the lender from the FFEL programs for a significant period, notwithstanding the agency's decision not to terminate the lender's eligibility to participate in the agency's program.
(a) The Secretary reviews a limitation, suspension, or termination action taken by a guaranty agency against a school participating in the FFEL programs to determine if national disqualification is appropriate. Upon completion of the Secretary's review, the Secretary notifies the guaranty agency and the school of his decision by mail.
(b) The Secretary disqualifies a school from participation in the FFEL programs if—
(1) The school waives review by the Secretary; or
(2) The Secretary conducts the review and determines that the limitation, suspension, or termination was imposed in accordance with section 428(b)(1)(T) of the Act.
(c)(1) Disqualification by the Secretary continues until the Secretary is satisfied that—
(i) The school has corrected the failure that led to the limitation, suspension, or termination; and
(ii) There are reasonable assurances that the school will comply with the requirements of the FFEL programs in the future.
(2) Revocation of disqualification by the Secretary does not remove any limitation, suspension, or termination imposed by the agency whose action resulted in the disqualification.
(d) A guaranty agency shall refer a limitation, suspension, or termination action that it takes against a school to the Secretary within 30 days of its final decision to limit, suspend, or terminate the school's eligibility to participate in the agency's program.
(e) The Secretary reviews an agency's limitation, suspension, or termination of a school's eligibility only when the guaranty agency's action is final, i.e., the institution is not entitled to any further appeals within the guaranty agency. A subsequent court challenge to an agency's action does not by itself affect the timing of the Secretary's review.
(f) The guaranty agency's notice to the Secretary regarding a termination action must include a certified copy of the administrative record compiled by the agency with regard to the action. The record must include certified copies of the following documents:
(1) The guaranty agency's letter initiating the action.
(2) The school's response.
(3) The transcript of the agency's hearing.
(4) The decision of the agency's hearing officer.
(5) The decision of the agency on appeal from the hearing officer's decision, if any.
(6) The regulations and written procedures of the agency under which the action was taken.
(7) The audit or program review report or documented basis that led to the action.
(8) All other documents relevant to the action.
(g) The guaranty agency's referral notice to the Secretary regarding a limitation or suspension action must include—
(1) The documents described in paragraph (f) of this section; and
(2) Documents describing and substantiating the existence of one or more of the circumstances described in paragraph (j) of this section.
(h)(1) Within 60 days of the Secretary's receipt of a referral notice described in paragraph (f) or (g) of this section, the Secretary makes an initial assessment, based on the agency's record, as to whether the agency's action appears to comply with section 428(b)(1)(T) of the Act.
(2) In the case of a referral notice described in paragraph (g) of this section, the Secretary also determines whether one or more of the circumstances described in paragraph (j) of this section exist.
(3) If the Secretary concludes that the agency's action appears to comply with section 428(b)(1)(T) of the Act, and, if applicable, one or more of the circumstances described in paragraph (j) of this section exist, the Secretary notifies the school that the Secretary will review the guaranty agency's action to determine whether to disqualify the school from further participation in the FFEL programs and gives the school an opportunity within 30 days from the date the notice is mailed—
(i) To waive the review and be disqualified immediately; or
(ii) To request a review.
(i) The Secretary's review of the guaranty agency's action is limited to—
(1) A review of the written record of the agency's proceedings; and
(2) Whether the agency action was taken in accordance with procedures that were substantially the same as procedures established by the Secretary in 34 CFR part 668, subpart G.
(j) In the case of an action by an agency that limits or suspends a school's eligibility to participate in the agency's program, the agency shall provide the Secretary with a referral as described in paragraph (g) of this section only if—
(1) The school has not corrected the violation. A violation is corrected if, among other things, the school has fully satisfied all liabilities incurred by the school as a result of the violation, including its liability to the Secretary, or the school has arranged to satisfy those liabilities in a manner acceptable to the parties to whom the liabilities are owed;
(2) The school has not provided assurances satisfactory to the agency of future compliance with program requirements; or
(3) The guaranty agency determines that special circumstances warrant disqualification of the school from the FFEL programs for a significant period, notwithstanding the agency's decision not to terminate the school's eligibility to participate in the agency's program.
(a) For an Authority to receive special allowance payments on loans made or acquired with the proceeds of a tax-exempt obligation, the Authority or its agent may not engage in any pattern or practice that results in a denial of a borrower's access to loans under the FFEL programs because of the borrower's race, sex, color, religion, national origin, age, disability status, income, attendance at a particular institution within the area served by the Authority, length of the borrower's
(b) The Secretary considers an Authority that makes or acquires loans guaranteed by an agency or organization that discriminates on one or more grounds listed in paragraph (a) of this section to have adopted a practice of denying access to loans on that ground unless the Authority makes provision for loan guarantees from other sources necessary to serve the borrowers excluded by that discriminatory policy.
The following is a reprint of Bulletin L-77a, issued on January 7, 1983, with minor modifications made to reflect changes in the program regulations since that date. All references to “the date of this bulletin” refer to that date. All references made to the Federal Insured Student Loan Program (FISLP) shall be understood to include the Federal PLUS Program. The bulletin includes references to the 120- and 180-day default periods that used to apply to FFELP and PLUS Program loans. Public Law 99-272 established new default periods of 180 and 240 days (as set out in 34 CFR 682.200 of these regulations) for all new loans and many existing ones. Although the discussion in this appendix C refers to the 120- and 180-day default periods, it is equally applicable to the new 180- and 240-day default periods.
This bulletin prescribes procedures for lenders to use (1) to cure violations of the requirements for due diligence in collection (“due diligence”) and timely filing of claims under the Federal Insured Student Loan Program (FISLP), and (2) to repay interest and special allowance overbillings made on loans evidencing such violations. See 34 CFR 682.507, 682.511.
The due diligence and timely filing requirements governing the FISLP were established in response to requests from some lenders for more detailed regulatory guidance on the proper handling of FISLP loans. Despite the promulgation of these provisions, a number of lenders have failed to exercise the requisite care in their treatment of these loans, thereby increasing the risk of default thereon and, in many cases, prejudicing the Secretary's ability to collect from the borrowers. At the time the current due diligence and timely filing rules were issued, the Secretary anticipated that violations of these rules would be so infrequent as to permit requests for cures to be handled individually. However, the unexpectedly high incidence of violations of these rules has made continued case-by-case treatment of all cure requests administratively unmanageable. After carefully considering the views of lenders and other program participants, the Secretary has decided to exercise his authority under 20 U.S.C. 1082(a)(5), (6), and institute uniform procedures by which lenders with loans involving violations of the due diligence or timely filing requirements may cure these violations.
Collection activity is required to begin immediately upon delinquency by the borrower in honoring the repayment obligation. This holds true whether or not the borrower received a repayment schedule or signed a repayment agreement. Under 34 CFR 682.200, default on a FISLP loan occurs when a borrower fails to make a payment when due, provided this failure persists for 120 days for loans payable in monthly installments, or for 180 days for loans payable in less frequent installments. If, however, the lender has added the optional provision to the promissory note requiring the borrower to execute a repayment agreement not later than 120 days prior to the expiration of the grace period, the loan entered repayment prior to September 4, 1985 (see 50 FR 35970), the lender sends the agreement to the borrower 150 days or more before the end of the grace period, and the agreement is not executed before the end of the grace period, default occurs at that time. One exception to this rule is as follows: If the holder of the loan is not the lender that made the loan, the holder may choose to forego enforcement of the optional 120-day provision in the note.
The 120/180 day default period applies regardless of whether payments were missed consecutively or intermittently. For example, if the borrower, on a loan payable in monthly installments, makes his January 1st payment on time, his February 1st payment two months late (April 1st), his March 1st payment three months late (June 1st), and makes no further payments, the default period begins on February 1st, with the first delinquency, and ends on August 1st, when the April 1st payment becomes 120 days past due. The lender must treat the payment made on April 1st as the February 1st payment, since the February 1st payment had not been made prior to that time. Similarly, the lender must treat the payment made on June 1st as the March 1st payment, since the March payment had not been made prior to that time.
Lenders are strongly encouraged to exercise forbearance,
The 90-day filing period applicable to FISLP default claims is set forth in 34 CFR 682.511(e) (1) and (3). The 90-day filing period begins at the end of the 120/180 day default period. The lender must file a default claim on a loan in default by the end of the filing period, unless the borrower brings the account current before the end of the filing period. In such a case, the lender may choose not to file a claim on the loan at that time.
In addition, for any loan less than 210 days delinquent on the date of this bulletin, the lender need not file a claim on that loan before the 210th day of delinquency (120-day default period plus 90-day filing period) if the borrower brings the account less than 120 days delinquent before such 210th day. Thus, in the above example, if the borrower makes the April 1st payment on August 2nd, the 90-day filing period continues to run from August 1st, unless the loan was less than 210 days delinquent on the date of this bulletin. If the loan was less than 210 days delinquent on the date of this bulletin, then the August 2nd payment makes the loan 91 days delinquent, and the lender may, but need not file a default claim on the loan at that time. If, however, that loan again becomes 120 days delinquent, the lender must file a default claim within 90 days thereafter (unless the loan is again brought to less than 120 days delinquent prior to the end of that 90 day period). In other words, for any loan less than 210 days delinquent on the date of this bulletin, the Secretary will permit a lender to treat payments made during the filing period as “curing” the default if such payments are sufficient to make the loan less than 120 days delinquent.
If a lender fails to comply with either the due diligence or timely filing requirements, the affected loan ceases to be insured; that is, the lender loses its right to receive interest benefits, special allowance and claim payments thereon. Some examples of violations of the due diligence requirements are set out in section I.C. below.
The following definitions apply to terms used throughout Section I of this bulletin.
The cure procedures applicable to loans involving due diligence violations also apply to loans involving violations of both the timely filing and due diligence requirements.
The Secretary will also excuse a due diligence violation by a lender if the account was brought current by the borrower (or another, other than the lender, on the borrower's behalf) prior to the 120th/180th day of the delinquency period during which the violation occurred.
For any loan involving “cured” due diligence violations, the lender may capitalize unpaid interest accruing on the loan from the commencement of the 120/180 day default period to the date of the reinstatement of insurance coverage. See sections I.C. and D. below. However, if the lender later files a claim on that loan, the lender must deduct this capitalized interest from the amount of the claim. This deduction must be reflected in column 15 on the ED Form 1207, Lender's Application for Insurance Claim on Federal Insured Student Loan, filed with the claim evidencing the cure.
For any default claim involving a “cured” timely filing violation, if insurance coverage is later reinstated, the lender may capitalize unpaid interest accruing on the loan from the commencement of the original 120/180 day default period to the date of the reinstatement of insurance coverage. See sections I.C. and D. below. However, if the lender later files a claim, on that loan, the lender must deduct this capitalized interest from the amount of the claim, except that the lender need not deduct from the claim unpaid interest that accrued on the loan during the original 120/180 day default period. This deduction must be reflected in Column 15 of the ED Form 1207, Lender's Application for Insurance Claim on Federal Insured Student Loan, filed with the claim evidencing the cure.
Some timely filing cures will not reinstate insurance coverage. For treatment of accrued interest in such cases, see Section I.D.1.c.
For all “cured” claims, the lender must submit:
• For loans on which a claim was previously rejected, all documents sent by the regional office with the original claim (when the claim was rejected and returned to the lender), including without limitation, the original ED Form 1207 and all documents showing the reason(s) for the original rejection;
• All documents ordinarily required in connection with the submission of a default claim, including, without limitation, the promissory note, which must bear a valid assignment to the United States of America;
• A new ED Form 1207; and
• All documents showing that the lender has complied with the applicable cure procedures and requirements.
A violation of the due diligence in collection rules occurs when a lender fails to meet requirements found in 34 CFR 682.507. For example, a violation occurs if the lender fails to:
• Remind the borrower of the date a missed payment was due within 15 days of delinquency;
• Attempt to contact the borrower and any endorser at least 3 times at regular intervals during the rest of the 120/180 day default period;
• Request preclaims assistance from the Department of Education;
• Request skip-tracing assistance from the Secretary, if required, or
• Send a final demand letter to the borrower exercising the option to accelerate the due date for the outstanding balance of the loan, unless the lender does not know the borrower's address as of the 90th day of delinquency.
(a) The lender obtains a new repayment agreement signed by the borrower which complies with the ten and fifteen year repayment limitations set out in 34 CFR 682.209(a)(7); or
(b) The lender obtains 3 full payments. If the borrower later defaults, the lender must submit evidence of these payments (e.g., copies of the checks) with the claim.
If, within 30 days after the lender sends these items, the borrower fails to make a full payment or to sign and return the new repayment agreement, the lender shall, within 5 working days thereafter, send the borrower a copy of the attached “48 hour” collection letter, on the lender's letterhead. (See attachment A.)
(i) Postal receipt signed by the borrower not more than 25 days prior to the date on which the lender sent the new repayment agreement, indicating acceptance of correspondence from the lender by the borrower at the address shown on the receipt;
(ii) A completed “Certification of Borrower Location” form (Attachment B).
The Secretary has determined that, in the vast majority of cases, the failure of a lender to comply with the timely filing requirement applicable to
It has always been the Secretary's interpretation of the FISLP statute and regulations that a lender's right to receive interest and special allowance payments on a FISLP loan terminates immediately following the lender's violation of the due diligence or timely filing requirements. This applies whether or not the lender has filed a claim on the loan. In other words, lenders may receive interest and special allowance only on loans which are insured by the Secretary. Since these violations result in the termination of insurance, they also result in the termination of FISLP benefits.
Any lender currently billing the Secretary for interest and special allowance on a loan that the lender knows involves a due diligence or timely filing violation must cease doing so immediately. However, lenders are not required at this time to review their loan portfolios for due diligence and timely filing violations.
A lender must make the repayments of interest and/or special allowance discussed in II.C. above, by way of an adjustment during the two quarters immediately following the discovery of the violation. These adjustments must be reported on the normal Lender‘s Interest and Special Allowance Request and Report (ED Form 799). Lenders are requested not to send a check with the adjustment; the overpaid amount will be deducted by the Secretary from the lender's next regular interest and special allowance payment. For five years after any loan for which an adjustment is made is repaid in full, the lender shall retain a record of the basis for the adjustment showing the amount(s) of the overbilling(s), and the date it used for cessation of interest or special allowance eligibility in calculating the overbilled amount. See 34 CFR 682.515(a)(2).
As an employee or agent of
I hereby certify as follows:
1. On (Date), I spoke with or received written communication from (copy attached):
(a) the borrower on the loan underlying the default claim, or
(b) a parent, spouse, or sibling of the borrower.
2. The borrower, parent, spouse, or sibling represented to me that the borrower's address and telephone number are—_____.
3. Within 15 days thereafter, this institution sent the borrower a new repayment agreement along with a collection letter of the type described in section I.D.1.a.ii of Bulletin L-77a, dated January 7, 1983, to the address set out in 2, above.
4. (Applicable only if 1(b), above, is used.) The letter and agreement referenced in 3, above, has not been returned undelivered.
The following is a reprint of Bulletin 88-G-138, issued on March 11, 1988, with modifications made to reflect changes in the program regulations. For a loan that has lost reinsurance prior to December 1, 1992, this policy applies only through November 30, 1995. For a loan that loses reinsurance on or after December 1, 1992, this policy applies until 3 years after the default claim filing deadline. For the purpose of determining the 3-year deadline, reinsurance is lost on the later of (a) 3 years from the last date the claim could have been filed for claim payment with the guaranty agency for a claim that was not filed; or (b) 3 years from the date the guaranty agency rejected the claim, for a claim that was filed. These deadlines are extended by periods during which collection activities are suspended due to the filing of a bankruptcy petition.
(1) This letter sets forth the circumstances under which the Secretary, pursuant to sections 432(a)(5) and (6) of the Higher Education Act of 1965 and 34 CFR 682.406(b) and 682.413(f), will waive certain of the Secretary's rights and claims with respect to Stafford Loans, PLUS, Supplemental Loans for Students (SLS), and Consolidation Program loans made under a guaranty agency program that involve violations of Federal regulations pertaining to due diligence in collection or timely filing. (These programs are collectively referred to in this letter as the FFEL Program.) This policy applies to due diligence violations on loans for which the first day of delinquency occurred on or after March 10, 1987 (the effective date of the November 10, 1986 due diligence regulations) and to timely filing violations occurring on or after December 26, 1986, whether or not the affected loans have been submitted as claims to the guaranty agency.
(2) The Secretary has been implementing a variety of regulatory and administrative actions to minimize defaults in the FFEL Program. As a part of this effort, the Secretary published final regulations on November 10, 1986, requiring lenders and guaranty agencies to undertake specific due diligence activities to collect delinquent and defaulted loans, and establishing deadlines for the filing of claims by lenders with guaranty agencies. In recognition of the time required for agencies and lenders to modify their internal procedures, the Secretary delayed for four months the date by which lenders were required to comply with the new due diligence requirements. Thus, § 682.411 of the regulations, which established minimum due diligence procedures that a lender must follow in order for a guaranty agency to receive reinsurance on a loan, became effective for loans for which the first day of delinquency occurred on or after March 10, 1987. The regulations make clear that compliance with these minimum requirements, and with the new timely filing deadlines, is a condition for an agency's receiving or retaining reinsurance payments made by the Secretary on a loan.
(3) The Department has received inquiries regarding the procedures by which a lender may cure a violation of § 682.411 regarding diligent loan collection, or of the 90-day deadline for the filing of default claims found in § 682.406(a)(3) and (a)(5), in order to reinstate the agency's right to reinsurance and the lender's right to interest benefits and special allowance. Preliminarily, please note that, absent an exercise of the Secretary's waiver authority, a guaranty agency may not receive or retain reinsurance payments on a loan on which the lender has violated the Federal due diligence or timely filing requirements, even if the lender has followed a cure procedure established by the agency. Under §§ 682.406(b) and 682.413(f), the Secretary—not the guaranty agency—decides whether to reinstate reinsurance coverage on a loan involving such a violation or any other violation of Federal regulations. A lender's violation of a guaranty agency's requirement that affects the agency's guarantee coverage also affects reinsurance coverage.
(4) References throughout this letter to “due diligence and timely filing” rules, requirements, and violations should be understood to mean only the Federal rules cited above, unless the context clearly requires otherwise.
This letter outlines the Secretary's waiver policy regarding certain violations of Federal due diligence or timely filing requirements on a loan insured by a guaranty agency. Unless your agency receives notification to the contrary, or the lender's violation involves fraud or other intentional misconduct, you may treat as reinsured any otherwise reinsured loan involving such a violation that has been cured in accordance with this letter.
As noted above, a lender's violation of a guaranty agency's requirement that affects the agency's guarantee coverage also affects reinsurance coverage. Thus, as a general rule, an agency that fails to enforce such a requirement and pays a default claim involving a violation is not eligible to receive reinsurance on the underlying loan. However, in light of the waiver policy outlined below, which provides more stringent cure procedures for violations occurring on or after May 1, 1988 than for pre-May 1, 1988 violations, some guaranty agencies with more stringent policies than the policy outlined below for the pre-May 1 violations have indicated that they wish to relax their own policies for violations of agency rules during that period. While the Secretary does not encourage any agency to do so, the Secretary will permit an agency to take either of the following approaches to its enforcement of its own due diligence and timely filing rules for violations occurring before May 1, 1988.
(1) The agency may continue to enforce its rules, even if they result in the denial of guarantee coverage by the agency on otherwise reinsurable loans; or
(2) The agency may decline to enforce its rules as to any loan that would be reinsured under the retrospective waiver policy outlined below. In other words, for violations of a guaranty agency's due diligence and timely filing rules occurring before May 1, 1988, a guaranty agency is authorized, but not required, to retroactively revise its own due diligence and timely filing standards to treat as guaranteed any loan amount that is reinsured under the retrospective enforcement policy outlined in section I.C.1. However, for any violation of an agency's due diligence or timely filing rules occurring on or after May 1, 1988, the agency must resume enforcing those rules in accordance with their terms, in order to receive reinsurance payments on the underlying loan. For these post-April 30 violations, and for any other violation of an agency's rule affecting its guarantee coverage, the Secretary will treat as reinsured all loans on which the agency has engaged in, and documented, a case-by-case exercise of reasonable discretion allowing for guarantee coverage to be continued or reinstated notwithstanding the violation. But any agency that otherwise fails, or refuses, to enforce such a rule does so without the benefit of reinsurance coverage on the affected loans, and the lenders continue to be ineligible for interest benefits and special allowance thereon.
Under 34 CFR 682.200, default on a FFEL Program loan occurs when a borrower fails to make a payment when due, provided this failure persists for 270 days for loans payable in monthly installments, or for 330 days for loans payable in less frequent installments.
Lenders are strongly encouraged to exercise forbearance, prior to default, for the benefit of borrowers who have missed payments intermittently but have otherwise indicated willingness to repay their loans.
(1) The 90-day filing period applicable to FFEL Program default claims is described in 34 CFR 682.406(a)(5). The 90-day filing period begins at the end of the 270/330-day default period. The lender ordinarily must file a default claim on a loan in default by the end of the filing period. However, the lender may, but need not, file a claim on that loan before the 360th day of delinquency (270-day default period plus 90-day filing period) if the borrower brings the account less than 270 days delinquent before the 360th day. Thus, in the above example, if the borrower makes the April 1st payment on December 28th, that payment makes the loan 241 days delinquent, and the lender may, but need not, file a default claim on the loan at that time. If, however, the loan again becomes 270 days delinquent, the lender must file a default claim within 90 days thereafter (unless the loan is again brought to less than 270 days delinquent prior to the end of that 90-day period). In other words, the Secretary will permit a lender to treat payments made during the filing period as curing the default if those payments are sufficient to make the loan less than 270 days delinquent.
(2) Section I of this letter outlines the Secretary's waiver policy for due diligence and timely filing violations. As noted above, to the extent that it results in the imposition of a lesser sanction than that available to the Secretary by statute or regulation, this policy reflects the exercise of the Secretary's authority to waive the Secretary's rights and claims in this area. Section II discusses the issue of the due date of the first payment on a loan and the application of the waiver policy to that issue. Section III provides guidance on several issues related to due diligence and timely filing as to which clarification has been requested by some program participants.
The following definitions apply to terms used throughout this letter:
(a) In cases when reinsurance is lost due to a failure to timely establish a first payment due date, the earliest unexcused violation would be the 46th day after the date the first payment due date should have been established.
(b) In cases when reinsurance is lost due to a gap of 46 days, the earliest unexcused violation date would be the 46th day following the last collection activity.
(c) In cases when reinsurance is lost due to three or more due diligence violations of 6 days or more, the earliest unexcused violation would be the day after the date of default.
(d) In cases when reinsurance is lost due to a timely filing violation, the earliest unexcused violation would be the day after the filing deadline.
(a) The period between the initial delinquency and the first collection activity;
(b) The period between collection activities (a request for preclaims assistance is considered a collection activity);
(c) The period between the last collection activity and default; or
(d) The period between the date a lender discovers a borrower has “skipped” and the lender's first skip-tracing activity.
The concept of “gap” is used herein simply as one measure of collection activity. This definition applies to loans subject to the FFEL and PLUS programs regulations published on or after November 10, 1986. For those loans, not all gaps are violations of the due diligence rules.
B.
a. The guaranty agency and lender must ensure that the lender repays all interest benefits and special allowance received on loans involving violations occurring prior to May 1, 1988, for which the lender is ineligible under the waiver policy for the “retrospective period” described in section I.C.1., or under the waiver policy for timely filing violations described in section I.E.1., by an adjustment to one of the next three quarterly billings for interest benefits and special allowance submitted by the lender in a timely manner after May 1, 1988. The guaranty agency's responsibility in this regard is satisfied by receipt of a certification from the lender that this repayment has been made in full.
b. The guaranty agency, on or before October 1, 1988, must repay all reinsurance received on loans involving violations occurring prior to May 1, 1988, for which the agency is ineligible under the waiver policy for the “retrospective period” described in section I.C.1., or under the waiver policy for timely filing violations described in section I.E.1. Pending completion of the repayment described above, a lender or guaranty agency may submit billings to the Secretary on loans that are eligible for reinsurance under the waiver policy in this letter until it learns that repayment in full will not be made, or until the deadline for a repayment has passed without it being made, whichever is earlier. Of course, a lender or guaranty agency is prohibited from billing the Secretary for program payments on any loan amount that is not eligible for reinsurance under the waiver policy outlined in this letter. In addition to the repayments required above, any amounts received in the future in violation of this prohibition must immediately be repaid to the Secretary.
A violation of the due diligence in collection rules occurs when a lender fails to meet the requirements found in 34 CFR 682.411. However, if a lender makes all required calls and sends all required letters during any of the delinquency periods described in that section, the lender is considered to be in compliance with that section for that period, even if the letters were sent before the calls were made. The special provisions for transfers apply whenever the violation(s) and, if applicable, the gap, were due to a transfer, as defined in section I.A.
a. There will be no reduction or recovery by the Secretary of payments to the lender or guaranty agency if no gap of 46 days or more (61 days or more for a transfer) exists.
b. If a gap of 46-60 days (61-75 days for a transfer) exists, principal will be reinsured, but accrued interest, interest benefits, and special allowance otherwise payable by the Secretary for the delinquency period are limited to amounts accruing through the date of default.
c. If a gap of 61 days or more (76 days or more for a transfer) exists, the borrower must be located after the gap, either by the agency or the lender, in order for reinsurance on the loan to be reinstated. (
a. There will be no reduction or recovery by the Secretary of payments to the lender or guaranty agency if there is no violation of Federal requirements of 6 days or more (21 days or more for a transfer.)
b. If there exist not more than two violations of 6 days or more each (21 days or more for a transfer), and no gap of 46 days or more (61 days or more for a transfer) exists, principal will be reinsured, but accrued interest, interest benefits, and special allowance otherwise payable by the Secretary for the delinquency period will be limited to amounts accruing through the date of default. However, the lender must complete all required activities before the claim filing deadline, except that a preclaims assistance request must be made before the 240th day of delinquency. If the lender fails to make this request by the 240th day, the Secretary will not pay any accrued interest, interest benefits, and special allowance for the most recent 180 days prior to default. If the lender fails to complete any other required activity before the claim filing deadline, accrued interest, interest benefits, and special allowance otherwise payable by the Secretary for the delinquency period will be limited to
c. If there exist three violations of 6 days or more each (21 days or more for a transfer) and no gap of 46 days or more (61 days or more for a transfer), the lender must satisfy the requirements outlined in I.E.1., or receive a full payment or a new signed repayment agreement in order for reinsurance on the loan to be reinstated. The Secretary does not pay any interest benefits or special allowance for the period beginning with the lender's earliest unexcused violation occurring after the last payment received before the cure is accomplished, and ending with the date, if any, that reinsurance on the loan is reinstated.
d. If there exist more than three violations of 6 days or more each (21 days or more for a transfer) of any type, or a gap of 46 days (61 days for a transfer) or more and at least one violation, the lender must satisfy the requirement outlined in section I.D.1., for reinsurance on the loan to be reinstated. The Secretary does not pay any interest benefits or special allowance for the period beginning with the lender's earliest unexcused violation occurring after the last payment received before the cure is accomplished, and ending with the date, if any, that reinsurance on the loan is reinstated.
a. There will be no reduction or recovery by the Secretary of payments to the lender or guaranty agency if there is no violation of Federal requirements of 6 days or more (21 days or more for a transfer).
b. If there exist not more than two violations of 6 days or more each (21 days or more for a transfer), and no gap of 46 days or more (61 days or more for a transfer) exists, principal will be reinsured, but accrued interest, interest benefits, and special allowance otherwise payable by the Secretary for the delinquency period will be limited to amounts accruing through the date of default. However, the lender must complete all required activities before the claim filing deadline, except that a default aversion assistance request must be made before the 330th day of delinquency. If the lender fails to make this request by the 330th day, the Secretary will not pay any accrued interest, interest benefits, and special allowance for the most recent 270 days prior to default. If the lender fails to complete any other required activity before the claim filing deadline, accrued interest, interest benefits, and special allowance otherwise payable by the Secretary for the delinquency period will be limited to amounts accruing through the 90th day before default.
c. If there exist three violations of 6 days or more each (21 days or more for a transfer) and no gap of 46 days or more (61 days or more for a transfer), the lender must satisfy the requirements outlined in I.E.1. or receive a full payment or a new signed repayment agreement in order for reinsurance on the loan to be reinstated. The Secretary does not pay any interest benefits or special allowance for the period beginning with the lender's earliest unexcused violation occurring after the last payment received before the cure is accomplished, and ending with the date, if any, that reinsurance on the loan is reinstated.
d. If there exist more than three violations of 6 days or more each (21 days or more for a transfer) of any type, or a gap of 46 days (61 days for a transfer) or more and at least one violation, the lender must satisfy the requirement outlined in section I.D.1. for reinsurance on the loan to be reinstated. The Secretary does not pay any interest benefits or special allowance for the period beginning with the lender's earliest unexcused violation occurring after the last payment received before the cure is accomplished and ending with the date, if any, that reinsurance on the loan is reinstated.
a. After the violations occur, the lender obtains a new repayment agreement signed by the borrower. The repayment agreement must comply with the repayment period limitations set out in 34 CFR 682.209(a)(8) and 682.209(h)(2); or
b. After the violations occur, the lender obtains one full payment. If the borrower later defaults, the guaranty agency must obtain evidence of this payment (e.g., a copy of the check) from the lender.
(1) A postal receipt signed by the borrower not more than 15 days prior to the date on which the lender sent the new repayment agreement, indicating acceptance of correspondence from the lender by the borrower at the address shown on the receipt; or
(2) Documentation submitted by the lender showing—
(i) The name, identification number, and address of the lender;
(ii) The name and Social Security number of the borrower; and
(iii) A signed certification by an employee or agent of the lender, that—
(A) On a specified date, he or she spoke with or received written communication (attached to the certification) from the borrower on the loan underlying the default claim, or a parent, spouse, sibling, roommate, or neighbor of the borrower;
(B) The address and, if available, telephone number of the borrower were provided to the lender in the telephone or written communication; and
(C) In the case of a borrower whose address or telephone number was provided to the lender by someone other than the borrower, the new repayment agreement and the letter sent by the lender pursuant to section I.E.1.a., had not been returned undelivered as of 20 days after the date those items were sent, for due diligence violations described in section I.C.1.c. where the lender holds the loan on the date of this letter, and as of the date the lender filed a default claim on the cured loan, for all other violations.
II.
1. In cases where the lender learns that the borrower has entered the repayment period after the fact, current § 682.411 treats the 30th day after the lender receives this information as the first day of delinquency. In the course of discussion with lenders, the Secretary has learned that many lenders have not been using the 30th day after receipt of notice that the repayment period has begun (“the notice”) as the first payment due date. In recognition of this apparently widespread practice, the Secretary has decided that, both retrospectively and prospectively, a lender should be allowed to establish a first payment due date within 60 days after receipt of the notice, to capitalize interest accruing up to the first payment due date, and to exercise forbearance with respect to the period during which the borrower was in the repayment period but made no payment. In effect, this means that, if the lender sends the borrower a coupon book, billing notice, or other correspondence establishing a new first payment due date, on or before the 60th day after receipt of the notice, the lender is deemed to have exercised forbearance up to the new first payment due date. The new first payment due date must fall no later than 75 days after receipt of the notice (unless the lender establishes the first day of repayment under § 682.209(a)(3)(ii)(E)). In keeping with the 5-day tolerance permitted under section I.C.2.a., for the “prospective period,” or section I.C.3.a., for the “post 1998 amendment period,” a lender that sends the above-described material on or before the 65th day after receipt of the notice will be held harmless. However, a lender that does so on the 66th day will have failed by more than 5 days to send both of the collection letters required by § 682.411(c) to be sent within the first 30 days of delinquency and will thus have committed two violations of more than five days of that rule.
2. If the lender fails to send the material establishing a new first payment due date on or before the 65th day after receipt of the notice, it may thereafter send material establishing a new first payment due date falling not more than 45 days after the materials are sent and will be deemed to have exercised forbearance up to the new first payment due date. However, all violations and gaps occurring prior to the date on which the material is sent are subject to the waiver policies described in section I for violations falling in either the retrospective or prospective periods. This is an exception to the general policy set forth in section I.B.5., that only violations occurring during the most recent 180 or 270 days (as applicable) of the delinquency period on a loan are relevant to the Secretary's examination of due diligence.
III.
The waiver policy outlined in this letter was developed after extensive discussion and consultation with participating lenders and guaranty agencies. In the course of these discussions, lenders and agencies raised a number of questions regarding the due diligence rules as applied to various circumstances. The Secretary's responses to these questions follow.
The answer to questions 1 and 4 are applicable only to loans subject to § 682.411 of the FFEL and PLUS program regulations published on or after November 10, 1986.
20 U.S.C. 1087a
(a) Under the William D. Ford Federal Direct Loan (Direct Loan) Program (formerly known as the Federal Direct Student Loan Program), the Secretary makes loans to enable a student or parent to pay the costs of the student's attendance at a postsecondary school. This part governs the Federal Direct Stafford/Ford Loan Program, the Federal Direct Unsubsidized Stafford/Ford Loan Program, the Federal Direct PLUS Program, and the Federal Direct Consolidation Loan Program. The Secretary makes loans under the following program components:
(1) Federal Direct Stafford/Ford Loan Program (formerly known as the Federal Direct Stafford Loan Program), which provides loans to undergraduate, graduate, and professional students. The Secretary subsidizes the interest while the borrower is in an in-school, grace, or deferment period.
(2) Federal Direct Unsubsidized Stafford/Ford Loan Program (formerly known as the Federal Direct Unsubsidized Stafford Loan Program), which provides loans to undergraduate, graduate and professional students. The borrower is responsible for the interest that accrues during any period.
(3) Federal Direct PLUS Program, which provides loans to parents of dependent students. The borrower is responsible for the interest that accrues during any period.
(4) Federal Direct Consolidation Loan Program, which provides loans to borrowers to consolidate certain Federal educational loans.
(b) The Secretary makes a Direct Subsidized Loan, a Direct Unsubsidized Loan, or a Direct PLUS Loan only to a student or a parent of a student enrolled in a school that has been selected by the Secretary to participate in the Direct Loan Program.
(c) The Secretary makes a Direct Consolidation Loan only to—
(1) A borrower with a loan made under the Direct Loan Program; or
(2) A borrower with a loan made under the Federal Family Education Loan Program who is not able to receive—
(i) A Federal Consolidation Loan; or
(ii) A Federal Consolidation Loan with income-sensitive repayment terms that are satisfactory to the borrower.
(a)(1) Colleges, universities, graduate and professional schools, vocational schools, and proprietary schools selected by the Secretary may participate in the Direct Loan Program. Participation in the Direct Loan Program enables an eligible student or parent to obtain a loan to pay for the student's cost of attendance at the school.
(2) The Secretary may permit a school to participate in both the Federal Family Education Loan (FFEL) Program, as defined in 34 CFR part 600, and the Direct Loan Program. A school
(b) An eligible student who is enrolled at a school participating in the Direct Loan Program may borrow under the Federal Direct Stafford/Ford Loan and Federal Direct Unsubsidized Stafford/Ford Loan Programs. An eligible parent of an eligible dependent student enrolled at a school participating in the Direct Loan Program may borrow under the Federal Direct PLUS Program.
(a)(1) The definitions of the following terms used in this part are set forth in subpart A of the Student Assistance General Provisions, 34 CFR part 668:
(2) The following definitions are set forth in the regulations for Institutional Eligibility under the Higher Education Act of 1965, as amended, 34 CFR part 600:
(3) The following definitions are set forth in the regulations for the Federal Family Education Loan (FFEL) Program, 34 CFR part 682:
(b) The following definitions also apply to this part:
(i) Except as provided in paragraph (2)(iii) of this definition, veterans’ educational benefits paid under chapters 30, 31, 32, and 35 of title 38 of the United States Code;
(ii) Educational benefits paid under chapters 106 and 107 of title 10 of the United States Code (Selected Reserve Educational Assistance Program);
(iii) Reserve Officer Training Corps (ROTC) scholarships and subsistence allowances awarded under chapter 2 of title 10 and chapter 2 of title 37 of the United States Code;
(iv) Benefits paid under Public Law 97-376, section 156: Restored Entitlement Program for Survivors (or Quayle benefits);
(v) Benefits paid under Public Law 96-342, section 903: Educational Assistance Pilot Program;
(vi) Any educational benefits paid because of enrollment in a postsecondary education institution;
(vii) The estimated amount of other Federal student financial aid, including but not limited to a Federal Pell Grant, campus-based aid, and the gross amount (including fees) of a Direct Subsidized, Direct Unsubsidized, and Direct PLUS Loan; and
(viii) Except as provided in paragraph (2)(iii) of this definition, national service education awards or post-service benefits under title I of the National and Community Service Act of 1990.
(2) Estimated financial assistance does not include—
(i) Those amounts used to replace the expected family contribution, including—
(A) Direct PLUS Loan amounts;
(B) Direct Unsubsidized Loan amounts; and
(C) Non-Federal loan amounts;
(ii) Federal Perkins loan and Federal Work-Study funds that the student has declined; and
(iii) For the purpose of determining eligibility for a Direct Subsidized Loan, veterans’ educational benefits paid under chapter 30 of title 38 of the United States Code (Montgomery GI Bill—Active Duty) and national service education awards or post-service benefits under title I of the National and Community Service Act of 1990.
(1) Direct Subsidized Consolidation Loans. Subsidized title IV education loans may be consolidated into a Direct Subsidized Consolidation Loan. Interest is not charged to the borrower during in-school, grace, and deferment periods.
(2) Direct Unsubsidized Consolidation Loans. Certain Federal education loans may be consolidated into a Direct Unsubsidized Consolidation Loan. The borrower is responsible for the interest that accrues during any period.
(3) Direct PLUS Consolidation Loans. Parent Loans for Undergraduate Students, Federal PLUS, Direct PLUS, and Direct PLUS Consolidation Loans may be consolidated into a Direct PLUS Consolidation Loan. The borrower is responsible for the interest that accrues during any period.
(2) For MPNs processed by the Secretary before July 1, 2003, loans may no longer be made under an MPN after the earliest of—
(i) The date the Secretary or the school receives the borrower's written notice that no further loans may be disbursed;
(ii) One year after the date of the borrower's first anticipated disbursement if no disbursement is made during that twelve-month period; or
(iii) Ten years after the date of the first anticipated disbursement, except that a remaining portion of a loan may be disbursed after this date.
(3) For MPNs processed by the Secretary on or after July 1, 2003, loans may no longer be made under an MPN after the earliest of—
(i) The date the Secretary or the school receives the borrower's written notice that no further loans may be made;
(ii) One year after the date the borrower signed the MPN or the date the Secretary receives the MPN, if no disbursements are made under that MPN; or
(iii) Ten years after the date the borrower signed the MPN or the date the Secretary receives the MPN, except that a remaining portion of a loan may be disbursed after this date.
(2) For the purpose of consolidating a defaulted loan under 34 CFR 685.220(d)(1)(ii)(E), the making of three consecutive, voluntary, on-time, full monthly payments on a defaulted loan.
(3) The required monthly payment amount may not be more than is reasonable and affordable based on the borrower's total financial circumstances. “On-time” means a payment made within 15 days of the scheduled due date, and voluntary payments are those payments made directly by the borrower and do not include payments obtained by Federal offset, garnishment, or income or asset execution.
(a) Subpart A contains general provisions regarding the purpose and scope of the Direct Loan Program.
(b) Subpart B contains provisions regarding borrowers in the Direct Loan Program.
(c) Subpart C contains certain requirements regarding schools in the Direct Loan Program.
(d) Subpart D contains provisions regarding school eligibility for participation and origination in the Direct Loan Program.
(a)
(i) The student is enrolled, or accepted for enrollment, on at least a half-time basis in a school that participates in the Direct Loan Program.
(ii) The student meets the requirements for an eligible student under 34 CFR part 668.
(iii) In the case of an undergraduate student who seeks a Direct Subsidized Loan or a Direct Unsubsidized Loan at a school that participates in the Federal Pell Grant Program, the student has received a determination of Federal Pell Grant eligibility for the period of enrollment for which the loan is sought.
(iv) In the case of a borrower whose previous loan was cancelled due to total and permanent disability, the student—
(A) In the case of a borrower whose prior loan under title IV of the Act was discharged after a final determination of total and permanent disability, the borrower—
(
(
(B) In the case of a borrower whose prior loan under title IV of the Act was discharged on or after July 1, 2001 and before July 1, 2002 after a final determination of total and permanent disability, the borrower—
(
(
(C) In the case of a borrower whose prior loan under title IV of the Act was conditionally discharged based on an initial determination that the borrower was totally and permanently disabled—
(
(
(
(
(v) In the case of a student who seeks a loan but does not have a certificate of graduation from a school providing secondary education or the recognized equivalent of such a certificate, the student meets the requirements under 34 CFR 668.32(e)(2), (3) or (4).
(2)(i) A Direct Subsidized Loan borrower must demonstrate financial need in accordance with title IV, part F of the Act.
(ii) The Secretary considers a member of a religious order, group, community, society, agency, or other organization who is pursuing a course of study at an institution of higher education to have no financial need if that organization—
(A) Has as its primary objective the promotion of ideals and beliefs regarding a Supreme Being;
(B) Requires its members to forego monetary or other support substantially beyond the support it provides; and
(C)(
(
(b)
(i) The parent is borrowing to pay for the educational costs of a dependent undergraduate student who meets the requirements for an eligible student under 34 CFR part 668.
(ii) The parent provides his or her and the student's social security number.
(iii) The parent meets the requirements pertaining to citizenship and residency that apply to the student under 34 CFR 668.33.
(iv) The parent meets the requirements concerning defaults and overpayments that apply to the student in 34 CFR 668.32(g).
(v) The parent complies with the requirements for submission of a Statement of Educational Purpose that apply to the student under 34 CFR part 668, except for the completion of a Statement of Selective Service Registration Status.
(vi) The parent meets the requirements that apply to a student under paragraph (a)(1)(iv) of this section.
(vii)(A) The parent—
(
(
(
(B) For purposes of paragraph (b)(1)(vii)(A) of this section, an adverse credit history means that as of the date of the credit report, the applicant—
(
(
(C) For the purposes of (b)(1)(vii)(A) of this section, the Secretary does not consider the absence of a credit history as an adverse credit history and does not deny a Direct PLUS loan on that basis.
(2) For purposes of paragraph (b)(1) of this section, a “parent” includes the individuals described in the definition of “parent” in 34 CFR 668.2 and the spouse of a parent who remarried, if that spouse's income and assets would have been taken into account when calculating a dependent student's expected family contribution.
(c)
(d)
(a)
(2) If the student is eligible for a Direct Subsidized Loan or a Direct Unsubsidized Loan, the Secretary or the school in which the student is enrolled must perform specific functions. Unless a school's agreement with the Secretary specifies otherwise, the school must perform the following functions:
(i) A school participating under school origination option 2 must create a loan origination record, ensure that the loan is supported by a completed Master Promissory Note (MPN), draw down funds, and disburse the funds to the student.
(ii) A school participating under school origination option 1 must create a loan origination record, ensure that the loan is supported by a completed MPN, and transmit the record and MPN (if required) to the Servicer. The Servicer initiates the drawdown of funds. The school must disburse the funds to the student.
(iii) If the student is attending a school participating under standard origination, the school must create a loan origination record and transmit the record to the alternative originator, which either confirms that a completed MPN supports the loan or prepares an MPN and sends it to the student. The Servicer receives the completed MPN from the student (if required) and initiates the drawdown of funds. The school must disburse the funds to the student.
(b)
(c)
(2) Once the applicant has submitted the completed application and promissory note to the Servicer, the Secretary makes the Direct Consolidation Loan under the procedures specified in § 685.220.
(a)
(ii)
(B)
(iii)
(B)
(2)
(B)
(ii)
(3)
(B)
(C)
(D)
(E)
(ii)
(B)
(C)
(D)
(b)
(2) For a Direct Unsubsidized Loan or a Direct Unsubsidized Consolidation Loan that qualifies for a grace period, the Secretary capitalizes the unpaid interest that accrues on the loan when the borrower enters repayment.
(3) Notwithstanding § 685.208(g)(5) and § 685.209(d)(3), for a Direct Loan not eligible for interest subsidies during periods of deferment, and for all Direct Loans during periods of forbearance, the Secretary capitalizes the unpaid interest that has accrued on the loan upon the expiration of the deferment or forbearance.
(4) Except as provided in paragraph (b)(3) of this section and in § 685.208(g)(5), and § 685.209(d)(3), the Secretary annually capitalizes unpaid interest when the borrower is paying under the alternative or income contingent repayment plans and the borrower's scheduled payments do not cover the interest that has accrued on the loan.
(5) The Secretary may capitalize unpaid interest when the borrower defaults on the loan.
(c)
(1)(i) Charges a borrower a loan fee not to exceed four percent of the principal amount of the loan on a Direct Subsidized or Direct Unsubsidized Loan; and
(ii) Charges a borrower a loan fee of four percent of the principal amount of the loan on a Direct PLUS Loan.
(2) Deducts the loan fee from the proceeds of the loan;
(3) In the case of a loan disbursed in multiple installments, deducts a pro rated portion of the fee from each disbursement; and
(4) Applies to a borrower's loan balance the portion of the loan fee previously deducted from the loan that is attributable to any portion of the loan that is—
(i) Repaid or returned within 120 days of disbursement, unless—
(A) The borrower has no Direct Loans in repayment status and has requested, in writing, that the repaid or returned funds be used for a different purpose; or
(B) The borrower has a Direct Loan in repayment status, in which case the payment is applied in accordance with § 685.211(a) unless the borrower has requested, in writing, that the repaid or returned funds be applied as a cancellation of all or part of the loan; or
(ii) Returned by a school in order to comply with the Act or with applicable regulations.
(d)
(2) The late charge may be assessed if the borrower fails to pay all or a portion of a required installment payment within 30 days after it is due.
(e)(1)
(2)
(a)
(i) $2,625 for a program of study of at least a full academic year in length.
(ii) For a one-year program of study with less than a full academic year remaining, the amount that is the same ratio to $2,625 as the—
(iii) For a program of study that is less than a full academic year in length, the amount that is the same ratio to $2,625 as the lesser of the—
(2) In the case of an undergraduate student who has successfully completed the first year of an undergraduate program but has not successfully completed the second year of an undergraduate program, the total amount the student may borrow for any academic year of study under the Federal Direct Stafford/Ford Loan Program in combination with the Federal Stafford Loan Program may not exceed the following:
(i) $3,500 for a program of study of at least a full academic year in length.
(ii) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $3,500 as the—
(3) In the case of an undergraduate student who has successfully completed the first and second years of a program of study of undergraduate education but has not successfully completed the remainder of the program, the total amount the student may borrow for any academic year of study under the Federal Direct Stafford/Ford Loan Program in combination with the Federal Stafford Loan Program may not exceed the following:
(i) $5,500 for a program of study of at least an academic year in length.
(ii) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $5,500 as the—
(4) In the case of a student who has an associate or baccalaureate degree which is required for admission into a program and who is not a graduate or professional student, the total amount the student may borrow for any academic year of study may not exceed the amounts in paragraph (a)(3) of this section.
(5) In the case of a graduate or professional student, the total amount the student may borrow for any academic year of study under the Federal Direct Stafford/Ford Loan Program in combination with the Federal Stafford Loan Program may not exceed $8,500.
(6) In the case of a student enrolled for no longer than one consecutive 12-month period in a course of study necessary for enrollment in a program leading to a degree or a certificate, the total amount the student may borrow for any academic year of study under the Federal Direct Stafford/Ford Loan Program in combination with the Federal Stafford Loan Program may not exceed the following:
(i) $2,625 for coursework necessary for enrollment in an undergraduate degree or certificate program.
(ii) $5,500 for coursework necessary for enrollment in a graduate or professional degree or certification program for a student who has obtained a baccalaureate degree.
(7) In the case of a student who has obtained a baccalaureate degree and is enrolled or accepted for enrollment in coursework necessary for a professional credential or certification from a State that is required for employment as a teacher in an elementary or secondary school in that State, the total amount the student may borrow for any academic year of study under the Federal Direct Stafford/Ford Loan Program in combination with the Federal Stafford Loan Program may not exceed $5,500.
(8) Except as provided in paragraph (a)(4) of this section, an undergraduate student who is enrolled in a program that is one academic year or less in length may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (a)(1) of this section.
(9) Except as provided in paragraph (a)(4) of this section—
(i) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has not successfully completed the first year of that program may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (a)(1) of this section.
(ii) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has successfully completed the first year of that program, but has not successfully completed the second year of the program, may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (a)(2) of this section.
(b)
(c)
(ii) In order for a dependent undergraduate student to receive this additional loan amount, the financial aid administrator must determine that the student's parent likely will be precluded by exceptional circumstances from borrowing under the Federal Direct PLUS Program or the Federal PLUS Program and the student's family is otherwise unable to provide the student's expected family contribution. The financial aid administrator shall base the determination on a review of the family financial information provided by the student and consideration of the student's debt burden and shall document the determination in the school's file.
(iii) “Exceptional circumstances” under paragraph (c)(1)(ii) of this section include but are not limited to circumstances in which the student's parent receives only public assistance or disability benefits, the parent is incarcerated, the parent has an adverse credit history, or the parent's whereabouts are unknown. A parent's refusal to borrow a Federal PLUS Loan or Direct PLUS Loan does not constitute “exceptional circumstances.”
(2) The additional amount that a student described in paragraph (c)(1)(i) of this section may borrow under the Federal Direct Unsubsidized Stafford/Ford Loan Program and the Federal Unsubsidized Stafford Loan Program for any academic year of study may not exceed the following:
(i) In the case of a student who has not successfully completed the first year of a program of undergraduate education—
(A) $4,000 for a program of study of at least a full academic year in length.
(B) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $4,000 as the—
(C) For a one-year program of study with less than a full academic year remaining, the amount that is the same ratio to $4,000 as the—
(D) For a program of study that is less than a full academic year in length, an amount that is the same ratio to $4,000 as the lesser of the—
(ii) In the case of a student who has completed the first year of a program of undergraduate education but has not successfully completed the second year of a program of undergraduate education—
(A) $4,000 for a program of study of at least a full academic year in length.
(B) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $4,000 as the—
(iii) In the case of a student who has successfully completed the second year of a program of undergraduate education but has not completed the remainder of the program of study—
(A) $5,000 for a program of study of at least a full academic year in length.
(B) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $5,000 as the—
(iv) In the case of a student who has an associate or baccalaureate degree which is required for admission into a program and who is not a graduate or professional student, the total amount the student may borrow for any academic year of study may not exceed the amounts in paragraph (c)(2)(iii) of this section.
(v) In the case of a graduate or professional student, $10,000.
(vi) In the case of a student enrolled for no longer than one consecutive 12-month period in a course of study necessary for enrollment in a program leading to a degree or a certificate—
(A) $4,000 for coursework necessary for enrollment in an undergraduate degree or certificate program.
(B) $5,000 for coursework necessary for enrollment in a graduate or professional degree or certification program for a student who has obtained a baccalaureate degree.
(vii) In the case of a student who has obtained a baccalaureate degree and is enrolled or accepted for enrollment in coursework necessary for a professional credential or certification from a State that is required for employment as a teacher in an elementary or secondary school in that State, $5,000.
(viii) Except as provided in paragraph (c)(2)(iv) of this section, an undergraduate student who is enrolled in a program that is one academic year or less in length may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (c)(2)(i) of this section.
(ix) Except as provided in paragraph (c)(2)(iv) of this section—
(A) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has not successfully completed the first year of that program may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (c)(2)(i) of this section.
(B) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has successfully completed the first year of that program, but has not successfully completed the second year of the program, may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (c)(2)(ii) of this section.
(d)
(1) $23,000 in the case of any student who has not successfully completed a program of study at the undergraduate level.
(2) $65,500 in the case of a graduate or professional student, including loans for undergraduate study.
(e)
(1) For a dependent undergraduate student, $23,000 minus any Direct Subsidized Loan and Federal Stafford Loan amounts, unless the student qualifies under paragraph (c) of this section for additional eligibility or qualified for that additional eligibility under the Federal SLS Program.
(2) For an independent undergraduate or a dependent undergraduate who
(3) For a graduate or professional student, $138,500 including any loans for undergraduate study, minus any Direct Subsidized Loan, Federal Stafford Loan, and Federal SLS Program loan amounts.
(f)
(g)
(h)
(i)
(1) For Direct Subsidized Loans, the percentage equals the percentage of the original amount of the Direct Consolidation Loan or Federal Consolidation Loan attributable to the Direct Subsidized and Federal Stafford Loans.
(2) For Direct Unsubsidized Loans, the percentage equals the percentage of the original amount of the Direct Consolidation Loan or Federal Consolidation Loan attributable to the Direct Unsubsidized, Federal SLS, and Federal Unsubsidized Stafford Loans.
(j)
(1) The student's estimated financial assistance for that period; and
(2) In the case of a Direct Subsidized Loan, the borrower's expected family contribution for that period.
(a)(1) A Direct Loan borrower whose loan is eligible for interest subsidies and who meets the requirements described in paragraph (b) of this section is eligible for a deferment during which periodic installments of principal and interest need not be paid.
(2) A Direct Loan borrower whose loan is not eligible for interest subsidies and who meets the requirements described in paragraph (b) of this section is eligible for a deferment during which periodic installments of principal need not be paid but interest does accrue and is capitalized or paid by the borrower.
(b) Except as provided in paragraphs (d) and (e) of this section, a Direct Loan borrower is eligible for a deferment during any period during which the borrower meets any of the following requirements:
(1)(i) The borrower—
(A) Is carrying at least one-half the normal full-time work load for the course of study that the borrower is pursuing, as determined by the eligible school the borrower is attending;
(B) Is pursuing a course of study pursuant to a graduate fellowship program approved by the Secretary; or
(C) Is pursuing a rehabilitation training program, approved by the Secretary, for individuals with disabilities; and
(ii) The borrower is not serving in a medical internship or residency program, except for a residency program in dentistry.
(iii)(A) For the purpose of paragraph (b)(1)(i) of this section, the Secretary processes a deferment when—
(
(
(
(B)(
(
(2)(i) The borrower is seeking and unable to find full-time employment.
(ii) For purposes of paragraph (b)(2)(i) of this section, the Secretary determines whether a borrower is eligible for a deferment due to the inability to find full-time employment using the standards and procedures set forth in 34 CFR 682.210(h) with references to the lender understood to mean the Secretary.
(3)(i) The borrower has experienced or will experience an economic hardship.
(ii) For purposes of paragraph (b)(3)(i) of this section, the Secretary determines whether a borrower is eligible for a deferment due to an economic hardship using the standards and procedures set forth in 34 CFR 682.210(s)(6) with references to the lender understood to mean the Secretary.
(c) No deferment under paragraphs (b) (2) or (3) of this section may exceed three years.
(d) If, at the time of application for a borrower's first Direct Loan, a borrower has an outstanding balance of principal or interest owing on any FFEL Program loan that was made, insured, or guaranteed prior to July 1, 1993, the borrower is eligible for a deferment during—
(1) the periods described in paragraph (b) of this section; and
(2) the periods described in 34 CFR 682.210(b), including those periods that apply to a “new borrower” as that term is defined in 34 CFR 682.210(b)(7).
(e) A borrower whose loan is in default is not eligible for a deferment, unless the borrower has made payment arrangements satisfactory to the Secretary.
(a)
(1) The Secretary determines that, due to poor health or other acceptable reasons, the borrower or endorser is currently unable to make scheduled payments;
(2) The borrower's payments of principal are deferred under § 685.204 and the Secretary does not subsidize the interest benefits on behalf of the borrower;
(3) The borrower is in a medical or dental internship or residency that must be successfully completed before the borrower may begin professional practice or service, or the borrower is serving in a medical or dental internship or residency program leading to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility that offers postgraduate training;
(4) The borrower is serving in a national service position for which the borrower is receiving a national service education award under title I of the
(5) The borrower—
(i) Is performing the type of service that would qualify the borrower for loan forgiveness under the requirements of the teacher loan forgiveness program in § 685.217; and
(ii) Is required, by the Secretary, before a forbearance is granted under § 685.205(a)(5)(i) to—
(A) Submit documentation for the period of the annual forbearance request showing the beginning and ending dates that the borrower is expected to perform, for that year, the type of service described in § 685.217(c); and
(B) Certify the borrower's intent to satisfy the requirements of § 685.217(c).
(6) For not more than three years during which the borrower or endorser—
(i) Is currently obligated to make payments on loans under title IV of the Act; and
(ii) The sum of these payments each month (or a proportional share if the payments are due less frequently than monthly) is equal to or greater than 20 percent of the borrower's or endorser's total monthly gross income.
(b)
(1) A properly granted period of deferment for which the Secretary learns the borrower did not qualify;
(2) The period for which payments are overdue at the beginning of an authorized deferment period;
(3) The period beginning when the borrower entered repayment until the first payment due date was established;
(4) The period prior to a borrower's filing of a bankruptcy petition;
(5) A period after the Secretary receives reliable information indicating that the borrower (or the student in the case of a Direct PLUS Loan) has died, or the borrower has become totally and permanently disabled, until the Secretary receives documentation of death or total and permanent disability;
(6) Periods necessary for the Secretary to determine the borrower's eligibility for discharge—
(i) Under § 685.214;
(ii) Under § 685.215;
(iii) Under § 685.216;
(iv) Under § 685.217; or
(v) Due to the borrower's or endorser's (if applicable) bankruptcy;
(7) A period of up to three years in cases where the effect of a variable interest rate on a fixed-amount or graduated repayment schedule causes the extension of the maximum repayment term;
(8) A period during which the Secretary has authorized forbearance due to a national military mobilization or other local or national emergency; or
(9) A period of up to 60 days necessary for the Secretary to collect and process documentation supporting the borrower's request for a deferment, forbearance, change in repayment plan, or consolidation loan. Interest that accrues during this period is not capitalized.
(c)
(2) The forbearance is renewable, upon request of the borrower, for the duration of the period in which the borrower meets the condition required for the forbearance.
(a) The borrower shall give the school the following information as part of the origination process for a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan:
(1) A statement, as described in 34 CFR part 668, that the loan will be used for the cost of the student's attendance.
(2) Information demonstrating that the borrower is eligible for the loan.
(3) Information concerning the outstanding FFEL Program and Direct Loan Program loans of the borrower
(4) A statement authorizing the school to release to the Secretary information relevant to the student's eligibility to borrow or to have a parent borrow on the student's behalf (e.g., the student's enrollment status, financial assistance, and employment records).
(b)(1) The borrower shall promptly notify the Secretary of any change of name, address, student status to less than half-time, employer, or employer's address; and
(2) The borrower shall promptly notify the school of any change in address during enrollment.
(c)
(i) Tax refund offset proceedings under 34 CFR 30.33.
(ii) Wage garnishment proceedings under section 488A of the Act.
(iii) Salary offset proceedings for Federal employees under 34 CFR part 31.
(iv) Credit bureau reporting proceedings under 31 U.S.C. 3711(f).
(2) If the borrower's defense against repayment is successful, the Secretary notifies the borrower that the borrower is relieved of the obligation to repay all or part of the loan and associated costs and fees that the borrower would otherwise be obligated to pay. The Secretary affords the borrower such further relief as the Secretary determines is appropriate under the circumstances. Further relief may include, but is not limited to, the following:
(i) Reimbursing the borrower for amounts paid toward the loan voluntarily or through enforced collection.
(ii) Determining that the borrower is not in default on the loan and is eligible to receive assistance under title IV of the Act.
(iii) Updating reports to credit bureaus to which the Secretary previously made adverse credit reports with regard to the borrower's Direct Loan.
(3) The Secretary may initiate an appropriate proceeding to require the school whose act or omission resulted in the borrower's successful defense against repayment of a Direct Loan to pay to the Secretary the amount of the loan to which the defense applies. However, the Secretary does not initiate such a proceeding after the period for the retention of records described in § 685.309(c) unless the school received actual notice of the claim during that period.
(a)
(2) The borrower's repayment of a Direct Loan may also be subject to the deferment provisions in § 685.204, the forbearance provisions in § 685.205, and the discharge provisions in § 685.212.
(b)
(i) The loan entered repayment before the in-school period began; and
(ii) The borrower has not been granted a deferment under § 685.204.
(2)(i) When a borrower ceases to be enrolled at an eligible school on at least a half-time basis, a six-month grace period begins, unless the grace period has been previously exhausted.
(ii)(A) Any borrower who is a member of a reserve component of the Armed
(B) Any borrower who is in a grace period when called or ordered to active duty as specified in paragraph (b)(2)(ii)(A) of this section is entitled to a full six-month grace period upon completion of the excluded period.
(iii) During a grace period, the borrower is not required to make any principal payments on a Direct Subsidized Loan.
(3) A borrower is not obligated to pay interest on a Direct Subsidized Loan for in-school or grace periods unless the borrower is required to make payments on the loan during those periods under paragraph (b)(1) of this section.
(4) The repayment period for a Direct Subsidized Loan begins the day after the grace period ends. A borrower is obligated to repay the loan under paragraph (a) of this section during the repayment period.
(c)
(i) The loan entered repayment before the in-school period began; and
(ii) The borrower has not been granted a deferment under § 685.204.
(2)(i) When a borrower ceases to be enrolled at an eligible school on at least a half-time basis, a six-month grace period begins, unless the grace period has been previously exhausted.
(ii)(A) Any borrower who is a member of a reserve component of the Armed Forces named in section 10101 of title 10, United States Code and is called or ordered to active duty for a period of more than 30 days is entitled to have the active duty period excluded from the six-month grace period. The excluded period includes the time necessary for the borrower to resume enrollment at the next available regular enrollment period. Any single excluded period may not exceed 3 years.
(B) Any borrower who is in a grace period when called or ordered to active duty as specified in paragraph (c)(2)(ii)(A) of this section is entitled to a full six-month grace period upon completion of the excluded period.
(iii) During a grace period, the borrower is not required to make any principal payments on a Direct Unsubsidized Loan.
(3) A borrower is responsible for the interest that accrues on a Direct Unsubsidized Loan during in-school and grace periods. Interest begins to accrue on the day the first installment is disbursed. Interest that accrues may be capitalized or paid by the borrower.
(4) The repayment period for a Direct Unsubsidized Loan begins the day after the grace period ends. A borrower is obligated to repay the loan under paragraph (a) of this section during the repayment period.
(d)
(e)
(2) A borrower who obtains a Direct Subsidized Consolidation Loan during an in-school period will be subject to the repayment provisions in paragraph (b) of this section.
(3) A borrower who obtains a Direct Unsubsidized Consolidation Loan during an in-school period will be subject to the repayment provisions in paragraph (c) of this section.
(f)
(1) The borrower completes the program;
(2) The borrower falls 60 days behind the due date for submission of a scheduled assignment, according to the schedule required in § 685.302. However, a school may grant the borrower one restoration to in-school status if the borrower fails to submit a lesson within this 60-day period after the due date for submission of a particular assignment if, within the 60-day period, the borrower declares, in writing, an intention to continue in the program and an understanding that the required lessons must be submitted on time; or
(3) That is 60 days following the latest allowable date established by the school for completing the program under the schedule required under § 685.302.
(a)
(2) A borrower may repay a Direct PLUS Loan or a Direct PLUS Consolidation Loan under the standard repayment plan, the extended repayment plan, or the graduated repayment plan.
(3) The Secretary may provide an alternative repayment plan in accordance with paragraph (g) of this section.
(4) All Direct Loans obtained by one borrower must be repaid together under the same repayment plan, except that a borrower of a Direct PLUS Loan or a Direct PLUS Consolidation Loan may repay the Direct PLUS Loan or the Direct PLUS Consolidation Loan separately from other Direct Loans obtained by that borrower.
(b)
(2) Periods of authorized deferment or forbearance are not included in the ten-year repayment period.
(3) A borrower's payments under the standard repayment plan are at least $50 per month, except that a borrower's final payment may be less than $50.
(4) The number of payments or the fixed monthly repayment amount may be adjusted to reflect changes in the variable interest rate identified in § 685.202(a).
(c)
(2) Periods of deferment and forbearance are not included in the number of years of repayment.
(3) A borrower makes fixed monthly payments of at least $50, except that a borrower's final payment may be less than $50.
(4) The number of payments or the fixed monthly repayment amount may be adjusted to reflect changes in the variable interest rate identified in § 685.202(a).
(d)
(2) Periods of deferment and forbearance are not included in the number of years of repayment.
(3) The number of payments or the monthly repayment amount may be adjusted to reflect changes in the variable interest rate identified in § 685.202(a).
(4) No scheduled payment under the graduated repayment plan may be less than the amount of interest accrued on the loan between monthly payments, less than 50 percent of the payment amount that would be required under the standard repayment plan, or more
(e)
(1) Less than $10,000, the borrower shall repay the loans within 12 years of entering repayment;
(2) Greater than or equal to $10,000 but less than $20,000, the borrower shall repay the loans within 15 years of entering repayment;
(3) Greater than or equal to $20,000 but less than $40,000, the borrower shall repay the loans within 20 years of entering repayment;
(4) Greater than or equal to $40,000 but less than $60,000, the borrower shall repay the loans within 25 years of entering repayment; and
(5) Greater than or equal to $60,000, the borrower shall repay the loans within 30 years of entering repayment.
(f)
(2) The regulations in effect at the time a borrower enters repayment and selects the income contingent repayment plan or changes into the income contingent repayment plan from another plan govern the method for determining the borrower's monthly repayment amount for all of the borrower's Direct Loans, unless—
(i) The Secretary amends the regulations relating to a borrower's monthly repayment amount under the income contingent repayment plan; and
(ii) The borrower submits a written request that the amended regulations apply to the repayment of the borrower's Direct Loans.
(3) Provisions governing the income contingent repayment plan are set out in § 685.209.
(g)
(2) The Secretary may require a borrower to provide evidence of the borrower's exceptional circumstances before permitting the borrower to repay a loan under an alternative repayment plan.
(3) If the Secretary agrees to permit a borrower to repay a loan under an alternative repayment plan, the Secretary notifies the borrower in writing of the terms of the plan. After the borrower receives notification of the terms of the plan, the borrower may accept the plan or choose another repayment plan.
(4) A borrower shall repay a loan under an alternative repayment plan within 30 years of the date the loan entered repayment, not including periods of deferment and forbearance.
(5) If the amount of a borrower's monthly payment under an alternative repayment plan is less than the accrued interest on the loan, the unpaid interest is capitalized until the outstanding principal amount is 10 percent greater than the original principal amount. After the outstanding principal amount is 10 percent greater than the original principal amount, interest continues to accrue but is not capitalized. For purposes of this paragraph, the original principal amount is the amount owed by the borrower when the borrower enters repayment.
(a)
(2) The annual amount payable under the income contingent repayment plan by a borrower is the lesser of—
(i) The amount the borrower would repay annually over 12 years using standard amortization multiplied by an income percentage factor that corresponds to the borrower's adjusted gross income (AGI) as shown in the income percentage factor table in a notice published annually by the Secretary in the
(ii) 20 percent of discretionary income.
(3) For purposes of this section, discretionary income is defined as a borrower's AGI minus the amount of the “HHS Poverty Guidelines for all States (except Alaska and Hawaii) and the District of Columbia” as published by the United States Department of Health and Human Services on an annual basis.
(4) For exact incomes not shown in the income percentage factor table in the annual notice published by the Secretary, an income percentage factor is calculated, based upon the intervals between the incomes and income percentage factors shown on the table.
(5) Each year, the Secretary recalculates the borrower's annual payment amount based on changes in the borrower's AGI, the variable interest rate, the income percentage factors in the table in the annual notice published by the Secretary, and updated HHS Poverty Guidelines (if applicable).
(6) If a borrower's monthly payment is calculated to be greater than $0 but less than or equal to $5.00, the amount payable by the borrower shall be $5.00.
(7) For purposes of the annual recalculation described in paragraph (a)(5) of this section, after periods in which a borrower makes payments that are less than interest accrued on the loan, the payment amount is recalculated based upon unpaid accrued interest and the highest outstanding principal loan amount (including amount capitalized) calculated for that borrower while paying under the income contingent repayment plan.
(8) For each calendar year after calendar year 1996, the Secretary publishes in the
(9) Examples of the calculation of monthly repayment amounts and tables that show monthly repayment amounts for borrowers at various income and debt levels are included in the annual notice published by the Secretary.
(b)
(2) Married borrowers may repay their loans jointly. The outstanding balances on the loans of each borrower are added together to determine the borrowers’ payback rate under (a)(1) of this section.
(3) The amount of the payment applied to each borrower's debt is the proportion of the payments that equals the same proportion as that borrower's debt to the total outstanding balance, except that the payment is credited toward outstanding interest on any loan before any payment is credited toward principal.
(c)
(2)
(3)
(4)
(ii) The repayment period includes periods in which the borrower makes payments under the standard repayment plan and under extended repayment plans in which payments are based on a repayment period that is up to 12 years. The repayment period does not include periods in which the borrower makes payments under the graduated and alternative repayment plans or periods of authorized deferment or forbearance. The repayment period also does not include periods in which the borrower makes payments under an extended repayment plan in which payments are based on a repayment period that is longer than 12 years.
(iii) If a borrower repays more than one loan under the income contingent repayment plan, a separate repayment period for each loan begins when that loan enters repayment.
(iv) If a borrower has not repaid a loan in full at the end of the 25-year repayment period under the income contingent repayment plan, the Secretary cancels the unpaid portion of the loan.
(v) At the beginning of the repayment period under the income contingent repayment plan, a borrower shall make monthly payments of the amount of interest that accrues on the borrower's Direct Loans until the Secretary calculates the borrower's monthly repayment amount on the basis of the borrower's income.
(5)
(6)
(i) That the Internal Revenue Service will disclose certain tax return information to the Secretary or the Secretary's agents; and
(ii) That if the borrower believes that special circumstances warrant an adjustment to the borrower's repayment obligations, as described in
(7)
(ii) The borrower shall consent to disclosure of the borrower's taxpayer identity information as defined in 26 U.S.C. 6103(b)(6), tax filing status, and AGI.
(iii) The borrower shall provide consent for a period of five years from the date the borrower signs the consent form. The Secretary provides the borrower a new consent form before that period expires. The IRS does not disclose tax return information after the IRS has processed a borrower's withdrawal of consent.
(iv) The Secretary designates the standard repayment plan for a borrower who selects the income contingent repayment plan but—
(A) Fails to provide the required written consent;
(B) Fails to renew written consent upon the expiration of the five-year period for consent; or
(C) Withdraws consent and does not select another repayment plan.
(v) If a borrower defaults and the Secretary designates the income contingent repayment plan for the borrower but the borrower fails to provide the required written consent, the Secretary mails a notice to the borrower establishing a repayment schedule for the borrower.
(a)
(2) If a borrower does not select a repayment plan, the Secretary designates the standard repayment plan described in § 685.208(b) for the borrower.
(b)
(i) The borrower was required to and did make a payment under the income contingent repayment plan in each of the prior three (3) months; or
(ii) The borrower was not required to make payments but made three reasonable and affordable payments in each of the prior three months; and
(iii) The borrower makes and the Secretary approves a request to change plans.
(2)(i) A borrower may not change to a repayment plan that has a maximum repayment period of less than the number of years the loan has already been in repayment, except that a borrower
(ii) If a borrower changes plans, the repayment period is the period provided under the borrower's new repayment plan, calculated from the date the loan initially entered repayment. However, if a borrower changes to the income contingent repayment plan, the repayment period is calculated as described in § 685.209(c)(4).
(a)
(2) A borrower may prepay all or part of a loan at any time without penalty. If a borrower pays any amount in excess of the amount due, the excess amount is a prepayment.
(3) If a prepayment equals or exceeds the monthly repayment amount under the borrower's repayment plan, the Secretary—
(i) Applies the prepaid amount according to paragraph (a)(1) of this section;
(ii) Advances the due date of the next payment unless the borrower requests otherwise; and
(iii) Notifies the borrower of any revised due date for the next payment.
(4) If a prepayment is less than the monthly repayment amount, the Secretary applies the prepayment according to paragraph (a)(1) of this section.
(b)
(c)
(d)
(2)
(3)
(ii) If a borrower defaults on a Direct Subsidized Loan, a Direct Unsubsidized Loan, a Direct Unsubsidized Consolidation Loan or a Direct Subsidized Consolidation Loan, the Secretary may designate the income contingent repayment plan for the borrower.
(e)
(i) To receive a loan for which the borrower is wholly or partially ineligible;
(ii) To receive interest benefits for which the borrower was ineligible; or
(iii) To receive loan proceeds for a period of enrollment for which the borrower was not eligible.
(2) If the Secretary makes the determination described in paragraph (e)(1) of this section, the Secretary sends an ineligible borrower a demand letter that requires the borrower to repay some or all of a loan, as appropriate. The demand letter requires that within 30 days from the date the letter is mailed, the borrower repay any principal amount for which the borrower is ineligible and any accrued interest, including interest subsidized by the Secretary, through the previous quarter.
(3) If a borrower fails to comply with the demand letter described in paragraph (e)(2) of this section, the borrower is in default on the entire loan.
(4) A borrower may not consolidate a loan under § 685.220 for which the borrower is wholly or partially ineligible.
(f)
(2) A defaulted Direct Loan on which a judgment has been obtained may not be rehabilitated.
(a)
(2) If an original or certified copy of the death certificate is not available, the Secretary discharges the loan only based on other reliable documentation that establishes, to the Secretary's satisfaction, that the borrower (or student) has died. The Secretary discharges a loan based on documentation other than an original or certified copy of the death certificate only under exceptional circumstances and on a case-by-case basis.
(3) In the case of a Direct PLUS Consolidation Loan that repaid a Direct PLUS Loan or a Federal PLUS Loan obtained on behalf of a student who dies, the Secretary discharges an amount equal to the portion of the outstanding balance of the consolidation loan, as of the date of the student's death, attributable to that Direct PLUS Loan or Federal PLUS Loan.
(b)
(c)
(d)
(e)
(f)
(g)
(2)
(3)
(h)
(a)
(i) Notifies the borrower that the loan will be in a conditional discharge status for up to three years from the date that the borrower became totally and permanently disabled, as certified under 685.213(b). The Secretary also notifies the borrower of the conditions of the conditional discharge period, and that all or part of the three-year conditional discharge period may predate the Secretary's initial determination.
(ii) Suspends any efforts to collect on the loan from the date of the initial determination described in paragraph (a)(1) of this section until the end of the conditional discharge period.
(2) If the borrower continues to meet the eligibility requirements for total and permanent disability discharge during and at the end of the three-year conditional discharge period, the Secretary—
(i) Discharges the obligation of the borrower and any endorser to make any further payments on the loan at the end of that period; and
(ii) Returns to the borrower any payments received after the date the borrower became totally and permanently disabled, as certified under § 685.213(b).
(3) If the borrower does not continue to meet the eligibility requirements for a total and permanent disability discharge at any time during or at the end of the three-year conditional discharge period, the Secretary resumes collection activity on the loan. The Secretary does not require the borrower to pay any interest that accrued on the loan from the date of the initial determination described in paragraph (a)(1) of this section through the end of the conditional discharge period.
(4) Except as provided in paragraph (e)(1) of this section, a borrower is not considered totally and permanently disabled based on a condition that existed at the time the loan was made, unless the borrower's condition substantially deteriorated after the loan was made so as to render the borrower totally and permanently disabled.
(b)
(c)
(1) The borrower's annual earnings from employment do not exceed 100 percent of the poverty line for a family of two, as determined in accordance with the Community Service Block Grant Act; and
(2) The borrower does not receive a new loan under the Perkins, FFEL, or Direct Loan programs, except for a FFEL or Direct consolidation loan that does not include any loans that are in a conditional discharge status.
(d)
(1) Is not required to make any payments of principal or interest on the loan beginning on the date the Secretary makes an initial determination that the borrower is totally and permanently disabled;
(2) Is not considered to be delinquent or in default on the loan, unless the loan was delinquent or in default at the time the conditional discharge was granted;
(3) Must promptly notify the Secretary of any changes in the borrower's address or telephone number;
(4) Must promptly notify the Secretary if the borrower's annual earnings from employment exceed the amount specified in paragraph (c)(1) of this section; and
(5) Must provide the Secretary, upon request, with additional documentation or information related to the borrower's eligibility for discharge under this section.
(e)
(2) For the purposes of discharging a loan under paragraph (e)(1) of this section, the provisions of this section apply to each loan included in the Direct Consolidation Loan, even if the loan is not a Direct Loan Program loan.
(3) If requested, a borrower seeking to discharge a loan obligation under paragraph (e)(1) of this section must provide the Secretary with the disbursement dates of the underlying loans.
(a)
(2) For purposes of this section—
(i) A school's closure date is the date that the school ceases to provide educational instruction in all programs, as determined by the Secretary; and
(ii) “School” means a school's main campus or any location or branch of the main campus.
(b)
(2) The discharge of a loan under this section qualifies the borrower for reimbursement of amounts paid voluntarily or through enforced collection on the loan.
(3) The Secretary does not regard a borrower who has defaulted on a loan discharged under this section as in default on the loan after discharge, and such a borrower is eligible to receive assistance under programs authorized by title IV of the Act.
(4) The Secretary reports the discharge of a loan under this section to all credit reporting agencies to which the Secretary previously reported the status of the loan.
(c)
(1) State that the borrower (or the student on whose behalf a parent borrowed)—
(i) Received the proceeds of a loan, in whole or in part, on or after January 1, 1986 to attend a school;
(ii) Did not complete the program of study at that school because the school closed while the student was enrolled, or the student withdrew from the school not more than 90 days before the school closed (or longer in exceptional circumstances); and
(iii) Did not complete the program of study through a teach-out at another school or by transferring academic credits or hours earned at the closed school to another school;
(2) State whether the borrower (or student) has made a claim with respect to the school's closing with any third party, such as the holder of a performance bond or a tuition recovery program, and, if so, the amount of any payment received by the borrower (or student) or credited to the borrower's loan obligation; and
(3) State that the borrower (or student)—
(i) Agrees to provide to the Secretary upon request other documentation reasonably available to the borrower that demonstrates that the borrower meets the qualifications for discharge under this section; and
(ii) Agrees to cooperate with the Secretary in enforcement actions in accordance with paragraph (d) of this section and to transfer any right to recovery against a third party to the Secretary in accordance with paragraph (e) of this section.
(d)
(i) Provide testimony regarding any representation made by the borrower to support a request for discharge;
(ii) Produce any documents reasonably available to the borrower with respect to those representations; and
(iii) If required by the Secretary, provide a sworn statement regarding those documents and representations.
(2) The Secretary denies the request for a discharge or revokes the discharge of a borrower who—
(i) Fails to provide the testimony, documents, or a sworn statement required under paragraph (d)(1) of this section; or
(ii) Provides testimony, documents, or a sworn statement that does not support the material representations made by the borrower to obtain the discharge.
(e)
(2) The provisions of this section apply notwithstanding any provision of State law that would otherwise restrict transfer of those rights by the borrower (or student), limit or prevent a transferee from exercising those rights, or establish procedures or a scheme of distribution that would prejudice the Secretary's ability to recover on those rights.
(3) Nothing in this section limits or forecloses the borrower's (or student's) right to pursue legal and equitable relief regarding disputes arising from matters unrelated to the discharged Direct Loan.
(f)
(2) If the borrower's current address is known, the Secretary mails the borrower a discharge application and an explanation of the qualifications and procedures for obtaining a discharge. The Secretary also promptly suspends any efforts to collect from the borrower on any affected loan. The Secretary may continue to receive borrower payments.
(3) If the borrower's current address is unknown, the Secretary attempts to locate the borrower and determines the borrower's potential eligibility for a discharge under this section by consulting with representatives of the closed school, the school's licensing agency, the school's accrediting agency, and other appropriate parties. If the Secretary learns the new address of a borrower, the Secretary mails to the borrower a discharge application and explanation and suspends collection, as described in paragraph (f)(2) of this section.
(4) If a borrower fails to submit the written request and sworn statement described in paragraph (c) of this section within 60 days of the Secretary's mailing the discharge application, the Secretary resumes collection and grants forbearance of principal and interest for the period in which collection activity was suspended. The Secretary may capitalize any interest accrued and not paid during that period.
(5) If the Secretary determines that a borrower who requests a discharge meets the qualifications for a discharge, the Secretary notifies the borrower in writing of that determination.
(6) If the Secretary determines that a borrower who requests a discharge does not meet the qualifications for a discharge, the Secretary notifies that borrower in writing of that determination and the reasons for the determination.
(a)
(i) Certified the student's eligibility for a Direct Loan on the basis of ability to benefit from its training and the student did not meet the eligibility requirements described in 34 CFR part 668 and section 484(d) of the Act, as applicable;
(ii) Signed the borrower's name on the loan application or promissory note without the borrower's authorization; or
(iii) Certified the eligibility of a student who, because of a physical or mental condition, age, criminal record, or other reason accepted by the Secretary, would not meet the requirements for employment (in the student's State of residence when the loan was originated) in the occupation for which the training program supported by the loan was intended.
(2)
(b)
(2) Discharge for unauthorized payment under paragraph (a)(2) of this section relieves the borrower of the obligation to repay the amount of the payment discharged.
(3) The discharge under this section qualifies the borrower for reimbursement of amounts paid voluntarily or through enforced collection on the discharged loan or payment.
(4) The Secretary does not regard a borrower who has defaulted on a loan discharged under this section as in default on the loan after discharge, and such a borrower is eligible to receive assistance under programs authorized by title IV of the Act.
(5) The Secretary reports the discharge under this section to all credit reporting agencies to which the Secretary previously reported the status of the loan.
(c)
(1)
(i) Received a disbursement of a loan, in whole or in part, on or after January 1, 1986 to attend a school; and
(ii) Received a Direct Loan at that school on the basis of an ability to benefit from the school's training and did not meet the eligibility requirements described in 34 CFR part 668 and section 484(d) of the Act, as applicable;
(2)
(i) State that he or she did not sign the document in question or authorize the school to do so; and
(ii) Provide five different specimens of his or her signature, two of which must be within one year before or after the date of the contested signature.
(3)
(i) State that he or she did not endorse the loan check or sign the authorization for electronic funds transfer or authorize the school to do so;
(ii) Provide five different specimens of his or her signature, two of which must be within one year before or after the date of the contested signature;
(iii) State that the proceeds of the contested disbursement were not delivered to the student or applied to charges owed by the student to the school.
(4)
(5)
(i) Agrees to provide to the Secretary upon request other documentation reasonably available to the borrower that demonstrates that the borrower meets the qualifications for discharge under this section; and
(ii) Agrees to cooperate with the Secretary in enforcement actions as described in § 685.214(d) and to transfer any right to recovery against a third party to the Secretary as described in § 685.214(e).
(6)
(d)
(2) If the borrower fails to submit the written request and sworn statement described in paragraph (c) of this section within 60 days of the Secretary's mailing the disclosure application, the Secretary resumes collection and grants forbearance of principal and interest for the period in which collection activity was suspended. The Secretary may capitalize any interest accrued and not paid during that period.
(3) If the borrower submits the written request and sworn statement described in paragraph (c) of the section, the Secretary determines whether to grant a request for discharge under this section by reviewing the request and sworn statement in light of information available from the Secretary's records and from other sources, including guaranty agencies, State authorities, and cognizant accrediting associations.
(4) If the Secretary determines that the borrower meets the applicable requirements for a discharge under paragraph (c) of this section, the Secretary notifies the borrower in writing of that determination.
(5) If the Secretary determines that the borrower does not qualify for a discharge, the Secretary notifies the borrower in writing of that determination and the reasons for the determination.
(a)(1)
(2)
(A) The borrower (or the student on whose behalf a parent borrowed) is not attending the school that owes the refund;
(B) The borrower has been unable to resolve the unpaid refund with the school; and
(C) The Secretary is unable to resolve the unpaid refund with the school within 120 days from the date the borrower submits a complete application in accordance with paragraph (c)(1) of this section regarding the unpaid refund. Any accrued interest and other charges associated with the unpaid refund are also discharged.
(ii) For the purpose of paragraph (a)(2)(i)(C) of this section, within 60
(b)
(2) The Secretary reports the discharge of a portion of a loan under this section to all credit reporting agencies to which the Secretary previously reported the status of the loan.
(c)
(i) State that the borrower (or the student on whose behalf a parent borrowed)—
(A) Received the proceeds of a loan, in whole or in part, on or after January 1, 1986 to attend a school;
(B) Did not attend, withdrew, or was terminated from the school within a timeframe that entitled the borrower to a refund; and
(C) Did not receive the benefit of a refund to which the borrower was entitled either from the school or from a third party, such as the holder of a performance bond or a tuition recovery program;
(ii) State whether the borrower (or student) has any other application for discharge pending for this loan; and
(iii) State that the borrower (or student)—
(A) Agrees to provide to the Secretary upon request other documentation reasonably available to the borrower that demonstrates that the borrower meets the qualifications for discharge under this section; and
(B) Agrees to cooperate with the Secretary in enforcement actions as described in § 685.214(d) and to transfer any right to recovery against a third party to the Secretary as described in § 685.214(e).
(2) The Secretary may discharge a portion of a loan under this section without an application if the Secretary determines, based on information in the Secretary's possession, that the borrower qualifies for a discharge.
(d)
(2) If the information in paragraph (d)(1) of this section is not available, the Secretary uses the following formulas to determine the amount eligible for discharge:
(i) In the case of a student who fails to attend or whose withdrawal or termination date is before October 7, 2000 and who completes less than 60 percent of the loan period, the Secretary discharges the lesser of the institutional charges unearned or the loan amount. The Secretary determines the amount of the institutional charges unearned by—
(A) Calculating the ratio of the amount of time remaining in the loan period after the student's last day of attendance to the actual length of the loan period; and
(B) Multiplying the resulting factor by the institutional charges assessed the student for the loan period.
(ii) In the case of a student who fails to attend or whose withdrawal or termination date is on or after October 7, 2000 and who completes less than 60 percent of the loan period, the Secretary discharges the loan amount unearned. The Secretary determines the loan amount unearned by—
(A) Calculating the ratio of the amount of time remaining in the loan
(B) Multiplying the resulting factor by the total amount of title IV grants and loans received by the student, or, if unknown, the loan amount.
(iii) In the case of a student who completes 60 percent or more of the loan period, the Secretary does not discharge any amount because a student who completes 60 percent or more of the loan period is not entitled to a refund.
(e)
(2) If a borrower who is sent a discharge application fails to submit the application within 60 days of the Secretary's sending the discharge application, the Secretary resumes collection and grants forbearance of principal and interest for the period in which collection activity was suspended. The Secretary may capitalize any interest accrued and not paid during that period.
(3) If a borrower qualifies for a discharge, the Secretary notifies the borrower in writing. The Secretary resumes collection and grants forbearance of principal and interest on the portion of the loan not discharged for the period in which collection activity was suspended. The Secretary may capitalize any interest accrued and not paid during that period.
(4) If a borrower does not qualify for a discharge, the Secretary notifies the borrower in writing of the reasons for the determination. The Secretary resumes collection and grants forbearance of principal and interest for the period in which collection activity was suspended. The Secretary may capitalize any interest accrued and not paid during that period.
(a)
(b)
(c)
(i) Is in a school district that qualifies for funds under title I of the Elementary and Secondary Education Act of 1965, as amended;
(ii) Has been selected by the Secretary based on a determination that more than 30 percent of the school's total enrollment is made up of children who qualify for services provided under title I; and
(iii) Is listed in the
(2) If the school at which the borrower is employed meets the requirements specified in paragraph (c)(1) of this section for at least one year of the borrower's five consecutive complete academic years of teaching and the school failed to meet those requirements in subsequent years, those subsequent years of teaching qualify for purposes of this section for that borrower.
(3) A borrower who is employed as an elementary school teacher must demonstrate knowledge and teaching skills in reading, writing, mathematics, and other areas of the elementary school curriculum, as certified by the chief administrative officer of the school in which the borrower was employed.
(4) A borrower who is employed as a secondary school teacher must teach in a subject area that is relevant to the borrower's academic major as certified by the chief administrative officer of the school in which the borrower was employed.
(5) The academic year may be counted as one of the borrower's five consecutive complete academic years if the borrower completes at least one-half of the academic year and the borrower's employer considers the borrower to have fulfilled his or her contract requirements for the academic year for the purposes of salary increases, tenure, and retirement if the borrower is unable to complete an academic year due to—
(i) A return to postsecondary education, on at least a half-time basis, that is directly related to the performance of the service described in this section;
(ii) A condition that is covered under the Family and Medical Leave Act of 1993 (FMLA) (19 U.S.C. 2654); or
(iii) A call or order to active duty status for more than 30 days as a member of a reserve component of the Armed Forces named in section 10101 of title 10, United States Code.
(6) If a borrower meets the requirements of paragraph (c)(5) of this section, the borrower's period of postsecondary education, active duty, or qualifying FMLA condition including the time necessary for the borrower to resume qualifying teaching no later than the beginning of the next regularly scheduled academic year, does not constitute a break in the required five consecutive years of qualifying teaching service.
(7) A borrower who teaches in more than one qualifying school during an academic year and demonstrates that the combined teaching was the equivalent of full-time, as supported by the certification of one or more of the chief administrative officers of the schools involved, is considered to have completed one academic year of qualifying teaching.
(8) A borrower is not eligible for teacher loan forgiveness on a defaulted
(9) A borrower may not receive loan forgiveness for qualifying teaching service under this section if the borrower receives a benefit for the same teaching service under subtitle D of title I of the National and Community Service Act of 1990.
(d)
(2) A borrower may not receive more than a total of $5,000 in loan forgiveness for outstanding principal and accrued interest under both this section and 34 CFR § 682.215.
(3) The Secretary does not refund payments that were received from or on behalf of a borrower who qualifies for loan forgiveness under this section.
(e)
(2) If the Secretary determines that the borrower meets the eligibility requirements for loan forgiveness under this section, the Secretary—
(i) Notifies the borrower of this determination; and
(ii) Unless otherwise instructed by the borrower, applies the proceeds of the loan forgiveness first to any outstanding Direct Unsubsidized Loan balances, next to any outstanding Direct Subsidized Loan balances, next to any qualifying Direct Unsubsidized Consolidation Loan balances, and last to any qualifying outstanding Direct Subsidized Consolidation Loan balances.
(3) If the Secretary determines that the borrower does not meet the eligibility requirements for loan forgiveness under this section, the Secretary notifies the borrower of this determination.
(a)
(b)
(1) Federal Stafford Loans.
(2) Guaranteed Student Loans.
(3) Federal Insured Student Loans (FISL).
(4) Direct Subsidized Loans.
(5) Direct Subsidized Consolidation Loans.
(6) Federal Perkins Loans.
(7) National Direct Student Loans (NDSL).
(8) National Defense Student Loans (NDSL).
(9) Federal PLUS Loans.
(10) Parent Loans for Undergraduate Students (PLUS).
(11) Direct PLUS Loans.
(12) Direct PLUS Consolidation Loans.
(13) Federal Unsubsidized Stafford Loans.
(14) Federal Supplemental Loans for Students (SLS).
(15) Federal Consolidation Loans.
(16) Direct Unsubsidized Loans.
(17) Direct Unsubsidized Consolidation Loans.
(18) Auxiliary Loans to Assist Students (ALAS).
(19) Health Professions Student Loans (HPSL) and Loans for Disadvantaged Students (LDS) made under subpart II of part A of title VII of the Public Health Service Act.
(20) Health Education Assistance Loans (HEAL).
(21) Nursing loans made under subpart II of part B of title VIII of the Public Health Service Act.
(c)
(2) The loans identified in paragraphs (b)(9) through (12) of this section may be consolidated into a Direct PLUS Consolidation Loan.
(3) The loans identified in paragraphs (b)(13) through (21) of this section may be consolidated into a Direct Unsubsidized Consolidation Loan. In addition, Federal Consolidation Loans under (b)(15) of this section may be consolidated into a Direct Subsidized Consolidation Loan, if they are eligible for interest benefits during a deferment period under Section 428C(b)(4)(C) of the Act.
(d)
(i) The borrower either—
(A) Has an outstanding balance on a Direct Loan; or
(B) Has an outstanding balance on an FFEL loan and asserts either—
(
(
(ii) On the loans being consolidated, the borrower is—
(A) In an in-school period and seeks to consolidate loans made under both the FFEL Program and the Direct Loan Program;
(B) In an in-school period at a school participating in the Direct Loan Program and seeks to consolidate loans made under the FFEL Program;
(C) In a six-month grace period;
(D) In a repayment period but not in default;
(E) In default but has made satisfactory repayment arrangements, as defined in applicable program regulations, on the defaulted loan; or
(F) In default but agrees to repay the consolidation loan under the income contingent repayment plan described in § 685.208(f) and signs the consent form described in § 685.209(d)(5).
(iii) The borrower certifies that no other application to consolidate any of the borrower's loans listed in paragraph (b) of this section is pending with any other lender.
(iv) The borrower agrees to notify the Secretary of any change in address.
(v) In the case of a Direct PLUS Consolidation Loan—
(A) The borrower may not have an adverse credit history as defined in § 685.200(b)(7)(ii); or
(B) If the borrower has such an adverse credit history, the borrower shall obtain an endorser for the consolidation loan who does not have an adverse credit history or provide documentation satisfactory to the Secretary that extenuating circumstances relating to the borrower's credit history exist.
(vi) In the case of a defaulted Direct Consolidation Loan, the borrower obtains the approval of the Secretary.
(vii) In the case of a loan on which the holder has obtained a judgment, the borrower obtains the approval of the Secretary.
(2) Two married borrowers may consolidate their loans together if they meet the following requirements:
(i) At least one spouse meets the requirements of paragraphs (d)(1)(i) and (d)(1)(v) of this section.
(ii) Both spouses meet the requirements of paragraphs (d)(1) (ii) through (d)(1)(iv) of this section.
(iii) Each spouse agrees to be held jointly and severally liable for the repayment of the total amount of the consolidation loan and to repay the loan regardless of any change in marital status.
(e)
(f)
(ii) If the Secretary approves an application for a consolidation loan, the Secretary pays to each holder of a loan selected for consolidation the amount necessary to discharge the loan.
(iii) For a Direct loan or FFEL Program loan that is in default, the Secretary limits collection costs that may be charged to the borrower to no more than those authorized under the FFEL Program and may impose reasonable limits on collection costs paid to the holder.
(2) Upon receipt of the proceeds of a Direct Consolidation Loan, the holder of a consolidated loan shall promptly apply the proceeds to fully discharge the borrower's obligation on the consolidated loan. The holder of a consolidated loan shall notify the borrower that the loan has been paid in full.
(3) The principal balance of a Direct Consolidation Loan is equal to the sum of the amounts paid to the holders of the consolidated loans.
(4) If the amount paid by the Secretary to the holder of a consolidated loan exceeds the amount needed to discharge that loan, the holder of the consolidated loan shall promptly refund the excess amount to the Secretary to be credited against the outstanding balance of the Direct Consolidation Loan.
(5) If the amount paid by the Secretary to the holder of the consolidated loan is insufficient to discharge that loan, the holder shall notify the Secretary in writing of the remaining amount due on the loan. The Secretary promptly pays the remaining amount due.
(g)
(h)
(1) A borrower may not repay a Direct PLUS Consolidation Loan under the income contingent repayment plan; and
(2) A borrower who became eligible to consolidate a defaulted loan under paragraph (d)(1)(ii)(E) of this section shall repay the consolidation loan under the income contingent repayment plan unless—
(i) The borrower was required to and did make a payment under the income contingent repayment plan in each of the prior three (3) months; or
(ii) The borrower was not required to make payments but made three reasonable and affordable payments in each of the prior three (3) months; and
(iii) The borrower makes and the Secretary approves a request to change plans.
(i)
(2) Under the extended or graduated repayment plan, the Secretary determines the repayment period under § 685.208(e) on the basis of the outstanding balances on all of the borrower's loans that are eligible for consolidation and the balances on other education loans except as provided in paragraph (i)(3) of this section.
(3)(i) The total amount of outstanding balances on the other education loans used to determine the repayment period under the graduated or extended repayment plan may not exceed the amount of the Direct Consolidation Loan.
(ii) The borrower may not be in default on the other education loan unless the borrower has made satisfactory repayment arrangements with the holder of the loan.
(iii) The lender of the other educational loan may not be an individual.
(4) A Direct Consolidation Loan receives a grace period if it includes a Direct Loan or FFEL Program loan for
(j)
(2) If a borrower adds an eligible loan to the consolidation loan under paragraph (e) of this section, the Secretary makes appropriate adjustments to the borrower's monthly repayment amount and repayment period.
(k)
(l)
(1)
(2)
(3)
(ii) If a borrower meets the requirements for total and permanent disability discharge under § 685.212(b), the Secretary discharges an amount equal to the portion of the outstanding balance of the consolidation loan, as of the date the borrower became totally and permanently disabled, attributable to any of that borrower's loans that were repaid by the consolidation loan.
(iii) If a borrower meets the requirements for discharge under § 685.212(d), (e), or (f) on a loan that was consolidated into a joint Direct Consolidation Loan, the Secretary discharges the portion of the consolidation loan equal to the amount of the loan that would be eligible for discharge under the provisions of § 685.212(d), (e), or (f) as applicable, and that was repaid by the consolidation loan.
(iv) If a borrower meets the requirements for loan forgiveness under § 685.212(h) on a loan that was consolidated into a joint Direct Consolidation Loan, the Secretary repays the portion of the outstanding balance of the consolidation loan attributable to the loan that would be eligible for forgiveness under the provisions of § 685.212(h), and that was repaid by the consolidation loan.
(a)
(i) Demonstrate to the satisfaction of the Secretary that the school meets the requirements for eligibility under the Act and applicable regulations; and
(ii) Enter into a written program participation agreement with the Secretary that identifies the loan program or programs in which the school chooses to participate.
(2) The chief executive officer of the school shall sign the program participation agreement on behalf of the school.
(b)
(1) Identify eligible students who seek student financial assistance at the institution in accordance with section 484 of the Act;
(2) Estimate the need of each of these students as required by part F of the Act for an academic year. For purposes of estimating need, a Direct Unsubsidized Loan, a Direct PLUS Loan, or any loan obtained under any State-sponsored or private loan program may be used to offset the expected family contribution of the student for that year;
(3) Certify that the amount of the loan for any student under part D of the Act is not in excess of the annual limit applicable for that loan program and that the amount of the loan, in combination with previous loans received by the borrower, is not in excess of the aggregate limit for that loan program;
(4) Set forth a schedule for disbursement of the proceeds of the loan in installments, consistent with the requirements of section 428G of the Act;
(5) Provide timely and accurate information to the Secretary for the servicing and collecting of loans—
(i) Concerning the status of student borrowers (and students on whose behalf parents borrow) while these students are in attendance at the school;
(ii) Upon request by the Secretary, concerning any new information of which the school becomes aware for these students (or their parents) after the student leaves the school; and
(iii) Concerning student eligibility and need, for the alternative origination of loans to eligible students and parents in accordance with part D of the Act;
(6) Provide assurances that the school will comply with requirements established by the Secretary relating to student loan information with respect to loans made under the Direct Loan Program;
(7) Provide that the school will accept responsibility and financial liability stemming from its failure to perform its functions pursuant to the agreement;
(8) Provide that eligible students at the school and their parents may participate in the programs under part B of the Act at the discretion of the Secretary for the period during which the school participates in the Direct Loan Program under part D of the Act, except that a student may not receive loans under both part D of the Act and part B of the Act for the same period of enrollment and a parent (borrowing for the same student) may not receive loans under both part D of the Act and part B of the Act for the same period of enrollment;
(9) Provide for the implementation of a quality assurance system, as established by the Secretary and developed in consultation with the school, to ensure that the school is complying with program requirements and meeting program objectives;
(10) Provide that the school will not charge any fees of any kind, however described, to student or parent borrowers for origination activities or the provision of any information necessary for a student or parent to receive a loan under part D of the Act or any benefits associated with such a loan; and
(11) Comply with other provisions that the Secretary determines are necessary to protect the interests of the United States and to promote the purposes of part D of the Act.
(c)
(i) Provides that the school or consortium will originate loans to eligible students and parents in accordance with part D of the Act; and
(ii) Provides that the note or evidence of obligation on the loan is the property of the Secretary.
(2) The chief executive officer of the school shall sign the supplemental agreement on behalf of the school.
(a)
(2) A school shall provide to the Secretary borrower information that includes but is not limited to—
(i) The borrower's eligibility for a loan, as determined in accordance with § 685.200 and § 685.203;
(ii) The student's loan amount; and
(iii) The anticipated and actual disbursement date or dates and disbursement amounts of the loan proceeds.
(3) A school may not originate a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan, or a combination of loans, for an amount that—
(i) The school has reason to know would result in the borrower exceeding the annual or maximum loan amounts in § 685.203; or
(ii) Exceeds the student's estimated cost of attendance less—
(A) The student's estimated financial assistance for that period; and
(B) In the case of a Direct Subsidized Loan, the borrower's expected family contribution for that period.
(4)(i) A school determines a Direct Subsidized or Direct Unsubsidized Loan amount in accordance with § 685.203 and the definitions in 34 CFR 668.2 for the proration of loan amounts required for undergraduate students.
(ii) When prorating a loan amount for a student enrolled in a program of study with less than a full academic year remaining, the school need not recalculate the amount of the loan if the number of hours for which an eligible student is enrolled changes after the school originates the loan.
(5) The date of loan origination is the date a school creates the electronic loan origination record.
(6) If a student has received a determination of need for a Direct Subsidized Loan that is $200 or less, a school may choose not to originate a Direct Subsidized Loan for that student and to include the amount as part of a Direct Unsubsidized Loan.
(7) A school may refuse to originate a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan or may reduce the borrower's determination of need for the loan if the reason for that action is documented and provided to the student in writing, and if—
(i) The determination is made on a case-by-case basis;
(ii) The documentation supporting the determination is retained in the student's file; and
(iii) The school does not engage in any pattern or practice that results in a denial of a borrower's access to Direct Loans because of the borrower's race, gender, color, religion, national origin, age, disability status, or income.
(8) A school may not assess a fee for the completion or certification of any Direct Loan Program forms or information or for the origination of a Direct Loan.
(9)(i) The minimum period of enrollment for which a school may originate a Direct Loan is—
(A) At a school that measures academic progress in credit hours and uses a semester, trimester, or quarter system, a single academic term (e.g., a semester or quarter); or
(B) At a school that measures academic progress in clock hours, or measures academic progress in credit hours but does not use a semester, trimester, or quarter system, the lesser of—
(
(
(ii) The maximum period for which a school may originate a Direct Loan is—
(A) Generally an academic year, as defined by 34 CFR 668.3, except that a school may use a longer period of time, not to exceed 12 months, corresponding to the period to which the school applies the annual loan limits under § 685.203; or
(B) For a defaulted borrower who has regained eligibility, the academic year
(b)
(2) Unless paragraph (b)(5) or (6) of this section applies, an institution must disburse the loan proceeds on a payment period basis in accordance with 34 CFR 668.164(b).
(3) Unless paragraph (b)(4), (5), (6), or (8) of this section applies—
(i) If a loan period is more than one payment period, the school must disburse loan proceeds at least once in each payment period; and
(ii) If a loan period is one payment period, the school must make at least two disbursements during that payment period. The school may not make the second disbursement until the calendar midpoint between the first and last scheduled days of class of the loan period.
(4)(i) If one or more payment periods have elapsed before a school makes a disbursement, the school may include in the disbursement loan proceeds for completed payment periods; or
(ii) If the loan period is equal to one payment period and more than one-half of it has elapsed, the school may include in the disbursement loan proceeds for the entire payment period.
(5)(i) If a school measures academic progress in an educational program in credit hours and either does not use terms or does not use terms that are substantially equal in length for a loan period, the school may not make a second disbursement until the later of—
(A) The calendar midpoint between the first and last scheduled days of class of the loan period; or
(B) The date, as determined by the school, that the student has completed half of the academic coursework in the loan period.
(ii) For purposes of this paragraph, terms in a loan period are substantially equal in length if no term in the loan period is more than two weeks longer than any other term in that loan period.
(6) If an educational program measures academic progress in clock hours, the school may not make a second disbursement until the later of—
(i) The calendar midpoint between the first and last scheduled days of class of the loan period; or
(ii) The date, as determined by the institution, that the student has completed half of the clock hours in the loan period.
(7) The school must disburse loan proceeds in substantially equal installments, and no installment may exceed one-half of the loan.
(8)(i) A school is not required to make more than one disbursement if—
(A)(
(
(B) The school is an eligible home institution originating a loan to cover the cost of attendance in a study abroad program and has a cohort default rate, calculated under subpart M of 34 part 668, of less than 5 percent for the single most recent fiscal year for which data are available; or
(C) The school is not in a State.
(ii) Paragraph (b)(8)(i)(A) of this section does not apply to any loans originated by the school beginning—
(A) 30 days after the date the school receives notification from the Secretary of a cohort default rate, calculated under subpart M of 34 CFR part 668, that causes the school to no longer meet the qualifications outlined in that paragraph; or
(B) October 1, 2002.
(iii) Paragraph (b)(8)(i)(B) of this section does not apply to any loans originated by the school beginning 30 days after the date the school receives notification from the Secretary of a cohort default rate, calculated under subpart M of 34 CFR part 668, that causes the school to no longer meet the qualifications outlined in that paragraph.
(c)
(2) A school that originates a loan must ensure that the loan is supported by a completed promissory note as proof of the borrower's indebtedness.
(d)
(2) A school that participates under school origination option 1 or standard origination must submit the initial disbursement record for a loan to the Secretary no later than 30 days following the date of the initial disbursement. The school must submit subsequent disbursement records, including adjustment and cancellation records, to the Secretary no later than 30 days following the date the disbursement, adjustment, or cancellation is made.
(a) This section contains requirements relating to the enrollment status of students in schools that offer programs of study by correspondence.
(b) A school that offers a course of study by correspondence shall establish a schedule for submission of lessons by its students and provide it to a prospective student prior to the student's enrollment.
(c) The school shall include in its schedule—
(1) A due date for each lesson in the course;
(2) A description of the options, if any, available to the student for altering the sequence of lesson submissions from the sequence in which they are otherwise required to be submitted;
(3) The date by which the course is to be completed; and
(4) The date by which any resident training must begin, the location of any resident training, and the period of time within which that resident training must be completed.
(a)
(b)
(ii)
(2)(i) Except in the case of a late disbursement under paragraph (d) of this section, or as provided in paragraph (b)(2)(iii) of this section, a school may disburse loan proceeds only to a student, or a parent in the case of a PLUS Loan, if the school determines the student has continuously maintained eligibility in accordance with the provisions of § 685.200 from the beginning of the loan period described in the promissory note.
(ii) In the event a student delays attending school for a period of time, the school may consider that student to have maintained eligibility for the loan from the first day of the period of enrollment. However, the school must
(iii) If, after a school makes the first disbursement to a borrower, the student becomes ineligible due solely to the school's loss of eligibility to participate in the title IV programs or the Direct Loan Program, the school may make subsequent disbursements to the borrower as permitted by 34 CFR part 668.
(iv) If, prior to making any disbursement to a borrower, the student temporarily ceases to be enrolled on at least a half-time basis, the school may make a disbursement and any subsequent disbursement to the student if the school determines and documents in the student's file—
(A) That the student has resumed enrollment on at least a half-time basis;
(B) The student's revised cost of attendance; and
(C) That the student continues to qualify for the entire amount of the loan, notwithstanding any reduction in the student's cost of attendance caused by the student's temporary cessation of enrollment on at least a half-time basis.
(3) If a registered student withdraws or is expelled prior to the first day of classes of the period of enrollment for which the loan is made, or fails to attend school during that period, or if the school is unable for any other reason to document that the student attended school during that period, the school shall notify the Secretary, within 30 days of the date described in § 685.305(a), of the student's withdrawal, expulsion, or failure to attend school, as applicable, and return to the Secretary—
(i) Any loan proceeds credited by the school to the student's account; and
(ii) The amount of payments made by the student to the school, to the extent that they do not exceed the amount of any loan proceeds disbursed by the school to the student.
(4)(i) If a student is enrolled in the first year of an undergraduate program of study and has not previously received a Federal Stafford, Federal Supplemental Loans for Students, Direct Subsidized, or Direct Unsubsidized Loan, a school may not disburse the proceeds of a Direct Subsidized or Direct Unsubsidized Loan until 30 days after the first day of the student's program of study unless—
(A) The school has a cohort default rate, calculated under subpart M of 34 CFR part 668, or weighted average cohort rate of less than 10 percent for each of the three most recent fiscal years for which data are available;
(B) The school is an eligible home institution originating a loan to cover the cost of attendance in a study abroad program and has a Direct Loan Program cohort rate, FFEL cohort default rate, or weighted average cohort rate of less than 5 percent for the single most recent fiscal year for which data are available; or
(C) The school is not in a State.
(ii) Paragraph (b)(4)(i)(A) of this section does not apply to any loans originated by the school beginning—
(A) 30 days after the date the school receives notification from the Secretary of a cohort default rate, calculated under subpart M of 34 CFR part 668, that causes the school to no longer meet the qualifications outlined in that paragraph; or
(B) October 1, 2002.
(iii) Paragraph (b)(4)(i)(B) of this section does not apply to any loans originated by the school beginning 30 days after the date the school receives notification from the Secretary of a cohort default rate, calculated under Subpart M of 34 CFR part 668, that causes the school to no longer meet the qualifications outlined in that paragraph.
(c)
(d)
(e)
(1) Using the student's Direct Unsubsidized, Direct PLUS, or State-sponsored or another non-Federal loan to cover the expected family contribution, if not already done; or
(2) Reducing one or more subsequent disbursements to eliminate the overaward.
(a)
(2) The initial counseling must be in person, by audiovisual presentation, or by interactive electronic means. In each case, the school must ensure that an individual with expertise in the title IV programs is reasonably available shortly after the counseling to answer the student borrower's questions. As an alternative, in the case of a student borrower enrolled in a correspondence program or a study-abroad program approved for credit at the home institution, the student borrower may be provided with written counseling materials before the loan proceeds are disbursed.
(3) The initial counseling must—
(i) Explain the use of a Master Promissory Note (MPN);
(ii) Emphasize to the borrower the seriousness and importance of the repayment obligation the student borrower is assuming;
(iii) Describe the likely consequences of default, including adverse credit reports, garnishment of wages, Federal offset, and litigation;
(iv) Inform the student borrower of sample monthly repayment amounts based on a range of student levels of indebtedness or on the average indebtedness of Direct Subsidized Loan and Direct Unsubsidized Loan borrowers at the same school or in the same program of study at the same school; and
(v) Emphasize that the student borrower is obligated to repay the full amount of the loan even if the student borrower does not complete the program, is unable to obtain employment upon completion, or is otherwise dissatisfied with or does not receive the educational or other services that the student borrower purchased from the school.
(4) A school may adopt an alternative approach for initial counseling as part of the school's quality assurance plan described in § 685.300(b)(9). If a school adopts an alternative approach, it is not required to meet the requirements of paragraphs (a)(1)-(3) of this section unless the Secretary determines that the alternative approach is not adequate for the school. The alternative approach must—
(i) Ensure that each student borrower subject to initial counseling under paragraph (a)(1) of this section is provided written counseling materials that contain the information described in paragraph (a)(3) of this section;
(ii) Be designed to target those student borrowers who are most likely to default on their repayment obligations and provide them more intensive counseling and support services; and
(iii) Include performance measures that demonstrate the effectiveness of the school's alternative approach. These performance measures must include objective outcomes, such as levels of borrowing, default rates, and withdrawal rates.
(5) If initial counseling is conducted through interactive electronic means, a school must take reasonable steps to ensure that each student borrower receives the counseling materials, and participates in and completes the initial counseling.
(6) The school must maintain documentation substantiating the school's compliance with this section for each student borrower.
(b)
(2) The exit counseling must be in person, by audiovisual presentation, or by interactive electronic means. In each case, the school must ensure that an individual with expertise in the title IV programs is reasonably available shortly after the counseling to answer the student borrower's questions. As an alternative, in the case of a student borrower enrolled in a correspondence program or a study-abroad program approved for credit at the home institution, the student borrower may be provided with written counseling materials within 30 days after the student borrower completes the program.
(3) If a student borrower withdraws from school without the school's prior knowledge or fails to complete the exit counseling as required, exit counseling must be provided either through interactive electronic means or by mailing written counseling materials to the student borrower at the student borrower's last known address within 30 days after the school learns that the student borrower has withdrawn from school or failed to complete the exit counseling as required.
(4) The exit counseling must—
(i) Inform the student borrower of the average anticipated monthly repayment amount based on the student borrower's indebtedness or on the average indebtedness of Direct Subsidized Loan and Direct Unsubsidized Loan borrowers at the same school or in the same program of study at the same school;
(ii) Review for the student borrower available repayment options including the standard repayment, extended repayment, graduated repayment, and income contingent repayment plans, and loan consolidation;
(iii) Suggest to the student borrower debt-management strategies that would facilitate repayment;
(iv) Explain to the student borrower how to contact the party servicing the student borrower's Direct Loans;
(v) Meet the requirements described in paragraphs (a)(3)(i), (ii), (iii), and (v) of this section;
(vi) Review for the student borrower the conditions under which the student borrower may defer or forbear repayment or obtain a full or partial discharge of a loan;
(vii) Review for the student borrower information on the availability of the Department's Student Loan Ombudsman's office;
(viii) Inform the student borrower of the availability of title IV loan information in the National Student Loan Data System (NSLDS); and
(ix) Require the student borrower to provide current information concerning name, address, social security number, references, and driver's license number and State of issuance, as well as the student borrower's expected permanent address, the address of the student borrower's next of kin, and the name and address of the student borrower's expected employer (if known).
(5) The school must ensure that the information required in paragraph (b)(4)(ix) of this section is provided to the Secretary within 60 days after the student borrower provides the information.
(6) If exit counseling is conducted through interactive electronic means, a school must take reasonable steps to ensure that each student borrower receives the counseling materials, and participates in and completes the exit counseling.
(7) The school must maintain documentation substantiating the school's compliance with this section for each student borrower.
(a) Except as provided in paragraph (b) of this section, a school shall follow the procedures in § 668.22(b) or (c), as applicable, for determining the student's date of withdrawal.
(b) For a student who does not return for the next scheduled term following a summer break, which includes any summer term(s) in which classes are
(c) The school shall use the date determined under paragraph (a) or (b) of this section for the purpose of reporting to the Secretary the student's date of withdrawal and for determining when a refund or return of title IV, HEA program funds must be paid under § 685.306.
(a)
(1) Shall pay that portion of the student's refund or return of title IV, HEA program funds that is allocable to a Direct Loan to the Secretary; and
(2) Shall provide simultaneous writ-ten notice to the borrower if the school pays a refund or return of title IV, HEA program funds to the Secretary on be-half of that student.
(b)
(a) A school participating in the Direct Loan Program may withdraw from the program by providing written notice to the Secretary.
(b) A participating school that intends to withdraw from the Direct Loan Program shall give at least 60 days notice to the Secretary.
(c) Unless the Secretary approves an earlier date, the withdrawal is effective on the later of—
(1) 60 days after the school notifies the Secretary; or
(2) The date designated by the school.
(a)
(1) The school's violation of a Federal statute or regulation; or
(2) The school's negligent or willful false certification.
(b) In requiring a school to repay funds to the Secretary or to purchase loans from the Secretary in connection with an audit or program review, the Secretary follows the procedures described in 34 CFR part 668, subpart H.
(c) The Secretary may impose a fine or take an emergency action against a school or limit, suspend, or terminate a school's participation in the Direct Loan Program in accordance with 34 CFR part 668, subpart G.
(a)
(1) Establish and maintain proper administrative and fiscal procedures and all necessary records as set forth in this part and in 34 CFR part 668; and
(2) Submit all reports required by this part and 34 CFR part 668 to the Secretary.
(b)
(1) Upon receipt of a student status confirmation report from the Secretary, complete and return that report to the Secretary within 30 days of receipt; and
(2) Unless it expects to submit its next student status confirmation report to the Secretary within the next 60 days, notify the Secretary within 30 days if it discovers that a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan has been made to or on behalf of a student who—
(i) Enrolled at that school but has ceased to be enrolled on at least a half-time basis;
(ii) Has been accepted for enrollment at that school but failed to enroll on at least a half-time basis for the period for which the loan was intended; or
(iii) Has changed his or her permanent address.
(3) The Secretary provides student status confirmation reports to a school at least semi-annually.
(4) The Secretary may provide the student status confirmation report in either paper or electronic format.
(c)
(d)
(e)
(f)
(g)
(a)(1) In order to qualify for initial participation in the Direct Loan Program, a school must meet the eligibility requirements in section 435(a) of the Act, including the requirement that it have a cohort default rate of less than 25 percent for at least one of the three most recent fiscal years for which data are available unless the school is exempt from this requirement under section 435(a)(2)(C) of the Act.
(2) In order to continue to participate in the Direct Loan Program, a school must continue to meet the requirements of paragraph (a)(1) of this section for years for which cohort default rate data represent the years prior to the school's participation in the Direct Loan Program.
(b) In order to qualify for initial participation, the school must not be subject to an emergency action or a proposed or final limitation, suspension, or termination action under sections 428(b)(1)(T), 432(h), or 487(c) of the Act.
(c) If schools apply as a consortium, each school in the consortium must meet the requirements in paragraphs (a) and (b) of this section.
(d) The Secretary selects schools to participate in the Direct Loan Program from among those that apply to participate and meet the requirements in paragraphs (a)(1), (b), and (c) of this section.
(a)
(2)
(i) Have participated in the Federal Perkins Loan Program, the Federal Pell Grant Program, or, for a graduate and professional school, a similar program for the three most recent years preceding the date of application to participate in the Direct Loan Program.
(ii) If participating in the Federal Pell Grant Program, not be on the reimbursement system of payment.
(iii) In the opinion of the Secretary, have had no severe performance deficiencies for any of the programs under title IV of the Act, including deficiencies demonstrated by the most recent audit or program review.
(iv) Be financially responsible in accordance with the standards of 34 CFR 668.15.
(v) Be current on program and financial reports and audits required under title IV of the Act for the 12-month period immediately preceding the date of application to participate in the Direct Loan Program.
(vi) Be current on Federal cash transaction reports required under title IV of the Act for the 12-month period immediately preceding the date of application to participate in the Direct Loan Program and have no final determination of cash on hand that exceeds immediate title IV program needs.
(vii) Have no material findings in any of the annual financial audits submitted for the three most recent years preceding the date of application to participate in the Direct Loan Program.
(viii) Provide an assurance that the school has no delinquent outstanding debts to the Federal Government, unless—
(A) Those debts are being repaid under or in accordance with a repayment arrangement satisfactory to the Federal Government; or
(B) The Secretary determines that the existence or amount of the debts has not been finally determined by the cognizant Federal agency.
(3) A school that meets the criteria to originate loans may participate under school origination option 1 or 2 or under standard origination.
(b)
(2)(i) At any time after the initial determination of a school's origination status, a school participating under origination option 2 may request to change to origination option 1 or standard origination, and a school participating under origination option 1 may request to change to standard origination.
(ii) The change in origination status becomes effective when the school receives notice of the Secretary's approval, unless the Secretary specifies a later date.
(3)(i) A school participating under origination option 1 may apply to participate under option 2, and a school participating in standard origination may apply to participate under either origination option 1 or 2 after one full year of participation in its initial origination status.
(ii) Applications to participate under another origination option are considered on an annual basis.
(iii) An application to participate under another origination option is evaluated on the basis of criteria and performance standards established by the Secretary, including but not limited to—
(A) Eligibility under paragraph (a)(2) of this section;
(B) Timely submission of accurate origination and disbursement records;
(C) Successful completion of reconciliation on a monthly basis; and
(D) Timely submission of completed and signed promissory notes, if applicable.
(iv) The change in origination status becomes effective when the school receives notice of the Secretary's approval, unless the Secretary specifies a later date.
(c)
(2) The Secretary may require a school to change origination status if the Secretary determines that such a change is necessary to ensure program integrity or if the school fails to meet the criteria and performance standards established by the Secretary, including but not limited to—
(i) For an origination option 1 school, eligibility under paragraph (a)(2) of this section, the timely submission of completed and signed promissory notes and accurate origination and disbursement records, and the successful completion of reconciliation on a monthly basis; and
(ii) For an origination option 2 school, the criteria and performance standards required of origination option 1 schools and accurate and timely drawdown requests.
(3) The change in origination status becomes effective when the school receives notice of the Secretary's approval, unless the Secretary specifies a later date.
(d)
(e)
(2) A school may request the Secretary to designate a different Servicer. Documentation of the unsatisfactory performance of the school's current Servicer must accompany the request. The Servicer requested must be one of those approved by the Secretary for participation in the Direct Loan Program.
(3) The Secretary grants the request if the Secretary determines that—
(i) The claim of unsatisfactory performance is accurate and substantial; and
(ii) The Servicer requested by the school can accommodate such a change.
(4) If the Secretary denies the school's request based on a determination under paragraph (e)(3)(ii) of this section, the school may request another Servicer.
(5) The change in Servicer is effective when the school receives notice of the Secretary's approval, unless the Secretary specifies a later date.
(f)
(2) To be authorized for multi-year use of the MPN, a school must—
(i) Be a four-year or graduate/professional school, or other institution meeting criteria or otherwise designated at the sole discretion of the Secretary; and
(ii)(A) Not be subject to an emergency action or a proposed or final limitation, suspension, or termination action under sections 428(b)(1)(T), 432(h), or 487(c) of the Act; and
(B) Meet other performance criteria determined by the Secretary.
(3) A school that is authorized by the Secretary for multi-year use of the MPN must develop and document a confirmation process in accordance with guidelines established by the Secretary for loans made under the multi-year feature of the MPN.
20 U.S.C. 1070a, unless otherwise noted.
The Federal Pell Grant Program awards grants to help financially needy students meet the cost of their postsecondary education.
(a) The definitions of the following terms used in this part are set forth in subpart A of the Student Assistance General Provisions, 34 CFR part 668:
(b) Definitions of the following terms used in this part are described in subpart A of the Student Assistance General Provisions, 34 CFR part 668:
(c) Other terms used in this part are:
(1) A student's expected family contribution, as determined in accordance with title IV, part F of the HEA; and
(2) A student's attendance costs as defined in title IV, part F of the HEA.
(3) The amount of funds available for making Federal Pell Grants.
(1) A student is able to transmit his or her application information to the central processor through his or her institution and an ISIR is transmitted back to the institution;
(2) A student through his or her institution is able to transmit any changes in application information to the central processor; and
(3) An institution is able to receive an ISIR from the central processor for a student.
(2) A student enrolled solely in a program of study by correspondence who is carrying a work load of at least 12 hours of work per week, or is earning at least 6 credit hours per semester, trimester or quarter. However, regardless of the work, no student enrolled solely in correspondence study is considered more than a half-time student.
(1) Personal identification information;
(2) Application data used to calculate the applicant's EFC; and
(3) EFC calculated by the central processor.
(1) The student's expected family contribution, as determined in accordance with part F of title IV of the HEA; and
(2) The student's cost of attendance as defined in part F of title IV of the HEA.
(1) Has not earned a baccalaureate or first professional degree; and
(2) Is in an undergraduate course of study which usually does not exceed 4 academic years, or is enrolled in a 4 to 5 academic year program designed to lead to a first degree. A student enrolled in a program of any other length is considered an undergraduate student for only the first 4 academic years of that program.
(a) Except as provided in paragraphs (c) and (d) of this section, a student is eligible to receive a Federal Pell Grant for the period of time required to complete his or her first undergraduate baccalaureate course of study.
(b) An institution shall determine when the student has completed the academic curriculum requirements for that first undergraduate baccalaureate course of study. Any noncredit or remedial course taken by a student, including a course in English language instruction, is not included in the institution's determination of that student's period of Federal Pell Grant eligibility.
(c) An otherwise eligible student who has a baccalaureate degree and is enrolled in a postbaccalaureate program is eligible to receive a Federal Pell Grant for the period of time necessary to complete the program if—
(1) The postbaccalaureate program consists of courses that are required by a State for the student to receive a professional certification or licensing credential that is required for employment as a teacher in an elementary or secondary school in that State;
(2) The postbaccalaureate program does not lead to a graduate degree;
(3) The institution offering the postbaccalaureate program does not also offer a baccalaureate degree in education;
(4) The student is enrolled as at least a half-time student; and
(5) The student is pursuing an initial teacher certification or licensing credential within a State.
(d) An institution must treat a student who receives a Federal Pell Grant under paragraph (c) of this section as an undergraduate student enrolled in an undergraduate program for title IV purposes.
(a) If an institution begins participation in the Federal Pell Grant Program during an award year, a student enrolled and attending that institution is eligible to receive a Federal Pell Grant for the payment period during which the institution enters into a program participation agreement with the Secretary and any subsequent payment period.
(b) If an institution becomes ineligible to participate in the Federal Pell Grant Program during an award year, an eligible student who was attending the institution and who submitted a valid SAR to the institution before the date the institution became ineligible is paid a Federal Pell Grant for that award year for—
(1) The payment periods that the student completed before the institution became ineligible; and
(2) The payment period in which the institution became ineligible.
(c)(1) If an institution loses its eligibility to participate in the FFEL or Direct Loan program under the provisions of subpart M of 34 CFR part 668, it also loses its eligibility to participate in the Federal Pell Grant Program for the same period of time.
(2) That loss of eligibility must be in accordance with the provisions of 34 CFR 668.187.
(d) An institution which becomes ineligible shall, within 45 days after the effective date of loss of eligibility, provide to the Secretary—
(1) The name and enrollment status of each eligible student who, during the award year, submitted a valid SAR to the institution before it became ineligible;
(2) The amount of funds paid to each Federal Pell Grant recipient for that award year;
(3) The amount due each student eligible to receive a Federal Pell Grant through the end of the payment period during which the institution became ineligible; and
(4) An accounting of the Federal Pell Grant expenditures for that award year to the date of termination.
(a) If, in addition to regular coursework, a student takes correspondence courses from either his or her own institution or another institution having an agreement for this purpose with the student's institution, the correspondence work may be included in determining the student's enrollment status to the extent permitted under paragraph (b) of this section.
(b) Except as noted in paragraph (c) of this section, the correspondence work that may be included in determining a student's enrollment status is that amount of work which—
(1) Applies toward a student's degree or certificate or is remedial work taken by the student to help in his or her course of study;
(2) Is completed within the period of time required for regular course work; and
(3) does not exceed the amount of a student's regular course work for the payment period for which the student's enrollment status is being calculated.
(c)(1) Notwithstanding the limitation in paragraph (b)(3) of this section, a student who would be a half-time student based solely on his or her correspondence work is considered a half-time student unless the calculation in paragraph (b) of this section produces an enrollment status greater than half-time.
(2) A student who would be a less-than-half-time student based solely on his or her correspondence work or a combination of correspondence work and regular course work is considered a less-than-half-time student.
(d) The following chart provides examples of the rules set forth in this section. It assumes that the institution defines full-time enrollment as 12 credits per term, making the half-time enrollment equal to 6 credits per term.
(a) Subject to available appropriations, the Secretary pays to each participating institution $5.00 for each student who receives a Federal Pell Grant at that institution for an award year.
(b) All funds an institution receives under this section must be used solely to pay the institution's cost of administering the Federal Pell Grant, Federal Perkins Loan, Federal Work-Study, and Federal Supplemental Educational Opportunity Grant programs.
(c) If an institution enrolls a significant number of students who are attending less-than-full-time or are independent students, the institution shall use a reasonable proportion of these funds to make financial aid services available during times and in places that will most effectively accommodate the needs of those students.
A student is not entitled to receive Federal Pell Grant payments concurrently from more than one institution or from the Secretary and an institution.
(a) As the first step to receiving a Federal Pell Grant, a student shall apply on an approved application form to the Secretary to have his or her expected family contribution calculated. A copy of this form is not acceptable.
(b) The student shall submit an application to the Secretary by—
(1) Providing the application form, signed by all appropriate family members, to the institution at which the student attends or plans to attend so that the institution can transmit electronically the application information to the Secretary under EDE; or
(2) Sending an approved application form to the Secretary.
(c) The student shall provide the address of his or her residence unless the student is incarcerated and the educational institution has made special arrangements with the Secretary to receive relevant correspondence on behalf of the student. If such an arrangement is made, the student shall provide the address indicated by the institution.
(d) For each award year the Secretary, through publication in the
The Secretary sends a student's application information and EFC as calculated by the central processor to the student on an SAR and allows each institution designated by the student to obtain an ISIR for that student.
(a) An applicant may request that the Secretary recalculate his or her expected family contribution if—
(1) He or she believes a clerical or arithmetic error has occurred; or
(2) The information he or she submitted was inaccurate when the application was signed.
(b) The applicant shall request that the Secretary make the recalculation described in paragraph (a) of this section by—
(1) Having his or her institution transmit that request to the Secretary under EDE; or
(2) Sending to the Secretary an approved form, certified by the student, and one of the student's parents if the student is a dependent student.
(c) If an institution transmits electronically the student's recalculation request to the Secretary, the corrected information must be supported by—
(1) Information contained on an approved form, that is certified by the student, and if the student is a dependent student, one of the student's parents; or
(2) Verification documentation provided by a student under 34 CFR 668.57.
(d) The recalculation request must be received by the Secretary no later than the deadline date established by the Secretary through publication in the
(a)
(i) The student submits a valid SAR to the institution; or
(ii) The institution obtains a valid ISIR for the student.
(A) Obtains a valid ISIR for that student; and
(B) For the 1995-96 award year, electronically or magnetically transmits Federal Pell Grant disbursement data to the Secretary.
(2) In determining a student's eligibility to receive his or her Federal Pell Grant, an institution is entitled to assume that SAR information or ISIR information is accurate and complete except under the conditions set forth in 34 CFR 668.16(f) and 668.60.
(b)
(1) The last date that the student is still enrolled and eligible for payment at that institution; or
(2) By the deadline date established by the Secretary through publication of a notice in the
(a) The amount of a student's Pell Grant for an academic year is based upon the payment and disbursement schedules published by the Secretary for each award year.
(b) No payment may be made to a student if the student's annual award is less than $200. However, a student who is eligible for an annual award that is equal to or greater than $200, but less than or equal to $400, shall be awarded a Federal Pell Grant of $400.
(a)(1)
(i) The student is enrolled in an eligible program that—
(A) Measures progress in credit hours;
(B) Is offered in semesters, trimesters, or quarters;
(C) Requires the student to enroll for at least 12 credit hours in each term in the award year to qualify as a full-time student; and
(D) Is not offered with overlapping terms; and
(ii) The institution offering the program—
(A) Provides the program using an academic calendar that includes two semesters or trimesters in the fall through the following spring, or three quarters in the fall, winter, and spring; and
(B) Provides at least 30 weeks of instructional time in the terms specified in paragraph (a)(1)(ii)(A) of this section.
(2)
(i) The student is enrolled in an eligible program that—
(A) Measures progress in credit hours;
(B) Is offered in semesters, trimesters, or quarters;
(C) Requires the student to enroll in at least 12 credit hours in each term in the award year to qualify as a full-time student; and
(D) Is not offered with overlapping terms; and
(ii) The institution offering the program—
(A) Provides the program using an academic calendar that includes two semesters or trimesters in the fall through the following spring, or three quarters in the fall, winter, and spring; and
(B) Does not provide at least 30 weeks of instructional time in the terms specified in paragraph (a)(2)(ii)(A) of this section.
(3)
(i) Measures progress in credit hours; and
(ii) Is offered in academic terms other than those described in paragraphs (a)(1) and (a)(2) of this section.
(4)
(i) Is offered in credit hours but is not offered in academic terms; or
(ii) Is offered in clock hours.
(5)
(6)
(i) If the program is offered in terms and credit hours, the institution uses the methodology in—
(A) Paragraph (b) of this section provided that the program meets all the criteria in paragraph (a)(1) of this section, except that in lieu of paragraph (a)(1)(ii)(B) of this section, the program provides at least the same number of weeks of instructional time in the terms specified in paragraph (a)(1)(ii)(A) of this section as are in the program's academic year; or
(B) Paragraph (d) of this section.
(ii) The institution uses the methodology described in paragraph (e) of this section if the program is offered in credit hours without terms or clock hours.
(iii) The institution uses the methodology described in § 690.66 if the program is correspondence study.
(b)
(1) Determining his or her enrollment status for the term;
(2) Based upon that enrollment status, determining his or her annual award from the Payment Schedule for full-time students or the Disbursement Schedule for three-quarter-time, half-time, or less-than-half-time students; and
(3) Dividing the amount described under paragraph (b)(2) of this section by—
(i) Two at institutions using semesters or trimesters or three at institutions using quarters; or
(ii) The number of terms over which the institution chooses to distribute the student's annual award if—
(A) An institution chooses to distribute all of the student's annual award determined under paragraph (b)(2) of this section over more than two terms at institutions using semesters or trimesters or more than three quarters at institutions using quarters; and
(B) The number of weeks of instructional time in the terms, including the additional term or terms, equals the weeks of instructional time in the program's academic year.
(c)
(1) Determining his or her enrollment status for the term;
(2) Based upon that enrollment status, determining his or her annual award from the Payment Schedule for full-time students or the Disbursement Schedule for three-quarter-time, half-time, or less-than-half-time students;
(3) Multiplying his or her annual award determined under paragraph (c)(2) of this section by the following fraction as applicable:
In a program using semesters or trimesters—
In a program using quarters—
(4)(i) Dividing the amount determined under paragraph (c)(3) of this
(ii) Dividing the student's annual award determined under paragraph (c)(2) of this section by the number of terms over which the institution chooses to distribute the student's annual award if—
(A) An institution chooses to distribute all of the student's annual award determined under paragraph (c)(2) of this section over more than two terms for programs using semesters or trimesters or more than three quarters for programs using quarters; and
(B) The number of weeks of instructional time in the terms, including the additional term or terms, equals the weeks of instructional time in the program's academic year definition.
(d)
(1)(i) For a student enrolled in a semester, trimester, or quarter, determining his or her enrollment status for the term; or
(ii) For a student enrolled in a term other than a semester, trimester, or quarter, determining his or her enrollment status for the term by—
(A) Dividing the number of weeks of instructional time in the term by the number of weeks of instructional time in the program's academic year;
(B) Multiplying the fraction determined under paragraph (d)(1)(ii)(A) of this section by the number of credit hours in the program's academic year to determine the number of hours required to be enrolled to be considered a full-time student; and
(C) Determining a student's enrollment status by comparing the number of hours in which the student enrolls in the term to the number of hours required to be considered full-time under paragraph (d)(1)(ii)(B) of this section for that term;
(2) Based upon that enrollment status, determining his or her annual award from the Payment Schedule for full-time students or the Disbursement Schedule for three-quarter-time, half-time, or less-than-half-time student;
(3) Multiplying his or her annual award determined under paragraph (d)(2) of this section by the following fraction:
(4) Paying the student the amount determined under paragraph (d)(3) of this section.
(e)
(1) Determining the student's Scheduled Federal Pell Grant using the Payment Schedule;
(2) Multiplying the amount determined under paragraph (e)(1) of this section by the lesser of—
(ii) One; and
(3) Multiplying the amount determined under paragraph (e)(2) of this section by—
(f) A single disbursement may not exceed 50 percent of any award determined under paragraph (d) or (e) of this section. If a payment for a payment period calculated under paragraphs (d) or (e) of this section would require the disbursement of more than 50 percent of a student's annual award in that payment period, the institution shall make at least two disbursements to the
(g)(1) Notwithstanding paragraphs (b), (c), (d), and (e) of this section and 34 CFR 668.66, the amount of a student's award for an award year may not exceed his or her Scheduled Federal Pell Grant award for that award year except as provided in § 690.67.
(2) For purposes of this section and § 690.66, an institution must define an academic year for each of its eligible programs in terms of the number of credit or clock hours and weeks of instructional time in accordance with the requirements of 34 CFR 668.2 and 668.3.
(a) If a student enrolls in a payment period which is scheduled to occur in two award years—
(1) The entire payment period must be considered to occur within one award year.
(2) The institution shall determine for each Federal Pell Grant recipient the award year in which the payment period will be placed subject to the restrictions set forth in paragraph (a)(3) of this section.
(3) The institution shall place a payment period with more than six months scheduled to occur within one award year in that award year.
(4) If an institution places the payment period in the first award year, it shall pay a student with funds from the first award year.
(5) If an institution places the payment period in the second award year, it shall pay a student with funds from the second award year.
(b) An institution may not make a payment which will result in the student receiving more than his or her Scheduled Federal Pell Grant for an award year.
(a) If a student who receives a Federal Pell Grant at one institution subsequently enrolls at a second institution in the same award year, the student may receive a Federal Pell Grant at the second institution only if—
(1) The student submits a valid SAR to the second institution; or
(2) The second institution obtains a valid ISIR.
(b) The second institution shall calculate the student's award according to § 690.63.
(c) The second institution may pay a Federal Pell Grant only for that portion of the academic year in which a student is enrolled at that institution. The grant amount must be adjusted, if necessary, to ensure that the grant does not exceed the student's Scheduled Federal Pell Grant for that award year except as provided under § 690.67.
(d) If a student's Scheduled Federal Pell Grant at the second institution differs from the Scheduled Federal Pell Grant at the first institution, the grant amount at the second institution is calculated as follows—
(1) The amount received at the first institution is compared to the Scheduled Federal Pell Grant at the first institution to determine the percentage of the Scheduled Federal Pell Grant that the student has received.
(2) That percentage is subtracted from 100 percent.
(3) The remaining percentage is the percentage of the Scheduled Federal Pell Grant at the second institution to which the student is entitled.
(e) The student's Federal Pell Grant for each payment period is calculated according to the procedures in § 690.63 unless the remaining percentage of the Scheduled Federal Pell Grant at the second institution, referred to in paragraph (d)(3) of this section, is less than the amount the student would normally receive for that payment period.
(f) A transfer student shall repay any amount received in an award year that exceeds—
(1) His or her Scheduled Federal Pell Grant; or
(2) The amount which he or she was eligible to receive for the award year under § 690.67.
(a) An institution calculates the Federal Pell Grant for a payment period for a student in a program of study offered by correspondence courses without terms, but not including any residential component by—
(1) Determining the student's annual award using the half-time Disbursement Schedule;
(2) Determining the length of the correspondence program in weeks of instructional time by—
(i) Preparing a written schedule for submission of lessons that reflect a workload of at least 12 hours of preparation per week; and
(ii) Determining the number of weeks of instructional time in the program of study using the written schedule for submission of lessons;
(3) Multiplying the annual award determined from the Disbursement Schedule for a half-time student by the lesser of—
(ii) One; and
(4) Multiplying the amount determined under (a)(3) of this section by—
(b) For purposes of paragraph (a) of this section—
(1) An academic year as measured in credit hours must consist of 2 payment periods—
(i) The first payment period must be the period of time in which the student completes the lesser of the first half of his or her academic year or program; and
(ii) The second payment period must be the period of time in which the student completes the lesser of the second half of the academic year or program; and
(2)(i) The institution shall make the first payment to a student for an academic year, as calculated under paragraph (a)(4) of this section, after the student submits 25 percent of the lessons or otherwise completes 25 percent of the work scheduled for the program or the academic year, whichever occurs last; and
(ii) The institution shall make the second payment to a student for an academic year, as calculated under (a)(4) of this section, after the student submits 75 percent of the lessons or otherwise completes 75 percent of the work scheduled for the program or the academic year, whichever occurs last.
(c) In a program of correspondence study offered by correspondence courses using terms but not including any residential component—
(1) The institution must prepare a written schedule for submission of lessons that reflects a workload of at least 30 hours of preparation per semester hour or 20 hours of preparation per quarter hour during the term;
(2)(i) If the student is enrolled in at least 6 credit hours that commence and are completed in that term, the Disbursement Schedule for a half-time student is used; or
(ii) If the student is enrolled in less than 6 credit hours that commence and are completed in that term the Disbursement Schedule for a less-than-half-time student is used;
(3) A payment for a payment period is calculated using the formula in
(4) The institution shall make the payment to a student for a payment period after that student completes 50 percent of the lessons or otherwise completes 50 percent of the work scheduled for the term, whichever occurs last.
(d) Payments for periods of residential training shall be calculated under § 690.63(d) if the residential training is offered using terms and credit hours or § 690.63(e) if the residential training is offered using credit hours without terms.
(a) The Secretary announces in the
(b) Based on the announcement described in paragraph (a) of this section, an institution may award up to a second Scheduled Federal Pell Grant award to a student in that award year if—
(1) The student is enrolled as a full-time student in an eligible program that is at least 2 academic years as measured in credit hours and weeks of instructional time and leads to an associate or baccalaureate degree at an institution;
(2) The student is enrolled only in coursework required for completing his or her associate or baccalaureate degree, including courses in his or her major area of study or electives that fulfill the student's graduation requirements, during any payment period in which the student is paid any portion of his or her second Scheduled Federal Pell Grant award;
(3) In the previous payment periods in the award year the student has completed the number of credit hours required in an academic year leading to his or her associate or baccalaureate degree program; and
(4) The student has completed the weeks of instructional time required for an academic year or will complete them in the first payment period for which he or she will receive a payment from his or her second Scheduled Federal Pell Grant award.
(c) If an institution awards a student up to a second Scheduled Federal Pell Grant award, the institution must make such awards to all students who qualify under paragraph (a) of this section.
This subpart deals with program administration by an institution of higher education.
(a) For each payment period, an institution may pay a Federal Pell Grant to an eligible student only after it determines that the student—
(1) Qualifies as an eligible student under 34 CFR Part 668, Subpart C;
(2) Is enrolled in an eligible program as an undergraduate student; and
(3) If enrolled in a credit hour program without terms or a clock hour program, has completed the payment period as defined in § 668.4 for which he or she has been paid a Federal Pell Grant.
(b) If an institution determines at the beginning of a payment period that a student is not maintaining satisfactory progress, but reverses that determination before the end of the payment period, the institution may pay a Federal Pell Grant to the student for the entire payment period.
(c) If an institution determines at the beginning of a payment period that a student is not maintaining satisfactory
(d) A member of a religious order, community, society, agency of or organization who is pursuing a course of study in an institution of higher education is considered to have an expected family contribution amount at least equal to the maximum authorized award amount for the award year if that religious order—
(1) Has as a primary objective the promotion of ideals and beliefs regarding a Supreme Being; and
(2) Provides subsistence support to its members, or has directed the member to pursue the course of study.
(a) In each payment period, an institution may pay a student at such times and in such installments as it determines will best meet the student's needs.
(b) The institution may pay funds in one lump sum for all the prior payment periods for which the student was an eligible student within the award year. The student's enrollment status must be determined according to work already completed.
(a) An institution shall disburse funds to a student or the student's account in accordance with the provisions in § 668.164.
(b) The institution shall return to the Federal Pell Grant account any funds paid to a student who, before the first day of classes—
(1) Officially or unofficially withdraws; or
(2) Is expelled.
(c)(1) An institution that intends to pay a student directly must notify the student in accordance with § 668.165(a).
(2) If a student does not pick up the check on time, the institution shall still pay the student if he or she requests payment within 20 days after the last date that his or her enrollment ends in that award year.
(3) If the student has not picked up his or her payment at the end of the 20-day period, the institution may credit the student's account only for any outstanding charges for tuition and fees and room and board for the award year incurred by the student while he or she was eligible.
(4) A student forfeits the right to receive the payment if he or she does not pick up a payment by the end of the 20 day period.
(5) Notwithstanding paragraph (d)(4) of this section, the institution may, if it chooses, pay a student who did not pick up his or her payment, through the next payment period.
(6) An institution shall make a late disbursement to an ineligible student in accordance with the provisions in 34 CFR 668.164(g).
(a)(1) Except as provided in paragraphs (a)(2) and (a)(3) of this section, a student is liable for any Federal Pell Grant overpayment made to him or her.
(2) The institution is liable for a Federal Pell Grant overpayment if the overpayment occurred because the institution failed to follow the procedures set forth in this part or 34 CFR Part 668. The institution must restore
(3) A student is not liable for, and the institution is not required to attempt recovery of or refer to the Secretary, a Federal Pell Grant overpayment if the amount of the overpayment is less than $25 and is not a remaining balance.
(b)(1) Except as provided in paragraph (a)(3) of this section, if an institution makes a Federal Pell Grant overpayment for which it is not liable, it must promptly send a written notice to the student requesting repayment of the overpayment amount. The notice must state that failure to make that repayment, or to make arrangements satisfactory to the holder of the overpayment debt to repay the overpayment, makes the student ineligible for further title IV, HEA program funds until final resolution of the Federal Pell Grant overpayment.
(2) If a student objects to the institution's Federal Pell Grant overpayment determination on the grounds that it is erroneous, the institution must consider any information provided by the student and determine whether the objection is warranted.
(c) Except as provided in paragraph (a)(3) of this section, if the student fails to repay a Federal Pell Grant overpayment or make arrangements satisfactory to the holder of the overpayment debt to repay the Federal Pell Grant overpayment, after the institution has taken the action required by paragraph (b) of this section, the institution must refer the overpayment to the Secretary for collection purposes in accordance with procedures required by the Secretary. After referring the Federal Pell Grant overpayment to the Secretary under this section, the institution need make no further efforts to recover the overpayment.
(a)
(i) The correction of a clerical or arithmetic error under § 690.14; or
(ii) A correction based on information required as a result of verification under 34 CFR part 668, subpart E.
(2) Except as described in 34 CFR 668.60(c), the institution shall adjust the student's award when an overaward or underaward is caused by the change in the expected family contribution. That adjustment must be made—
(i) Within the same award year—if possible—to correct any overpayment or underpayment; or
(ii) During the next award year to correct any overpayment that could not be adjusted during the year in which the student was overpaid.
(b)
(2)(i) If the student's projected enrollment status changes during a payment period after the student has begun attendance in all of his or her classes for that payment period, the institution may (but is not required to) establish a policy under which the student's award for the payment period is recalculated. Any such recalculations must take into account any changes in the cost of attendance. If such a policy is established, it must apply to all students.
(ii) If a student's projected enrollment status changes during a payment period before the student begins attendance in all of his or her classes for that payment period, the institution shall recalculate the student's enrollment status to reflect only those classes for which the student actually began attendance.
(c)
(a) An institution shall follow provisions for maintaining general fiscal records in this part and in 34 CFR 668.24(b).
(b) An institution shall maintain funds received under this part in accordance with the requirements in § 668.164.
(a) An institution shall follow the record retention and examination provisions in this part and in 34 CFR 668.24.
(b) For any disputed expenditures in any award year for which the institution cannot provide records, the Secretary determines the final authorized level of expenditures.
(a)(1) An institution may receive either a payment from the Secretary for an award to a Federal Pell Grant recipient, or a corresponding reduction in the amount of Federal funds received in advance for which it is accountable, if—
(i) The institution submits to the Secretary the student's Payment Data for that award year in the manner and form prescribed in paragraph (a)(2) of this section by September 30 following the end of the award year in which the grant is made, or, if September 30 falls on a weekend, on the first weekday following September 30; and
(ii) The Secretary accepts the student's Payment Data.
(2) The Secretary accepts a student's Payment Data that is submitted in accordance with procedures established through publication in the
(3) An institution that does not comply with the requirements of this paragraph may receive a payment or reduction in accountability only as provided in paragraph (d) of this section.
(b)(1) An institution shall report to the Secretary any change in enrollment status, cost of attendance, or other event or condition that causes a change in the amount of a Federal Pell Grant for which a student qualifies by submitting to the Secretary the student's Payment Data that discloses the basis and result of the change in award for each student. Through publication in the
(2) An institution shall submit in accordance with deadline dates established by the Secretary, through publication in the
(3) An institution that timely submits, and has accepted by the Secretary, the Payment Data for a student in accordance with this section shall report a reduction in the amount of a Federal Pell Grant award that the student received when it determines that an overpayment has occurred, unless that overpayment is one for which the institution is not liable under § 690.79(a).
(c) In accordance with 34 CFR 668.84 the Secretary may impose a fine on the institution if the institution fails to comply with the requirements specified in paragraphs (a) or (b) of this section.
(d)(1) Notwithstanding paragraphs (a) or (b) of this section, if an institution demonstrates to the satisfaction of the Secretary that the institution has provided Federal Pell Grants in accordance with this part but has not received credit or payment for those grants, the institution may receive payment or a reduction in accountability for those grants in accordance with paragraphs (d)(4) and either (d)(2) or (d)(3) of this section.
(2) The institution must demonstrate that it qualifies for a credit or payment by means of a finding contained in an audit report of an award year that was the first audit of that award year and that was conducted after December 31, 1988 and timely submitted to the Secretary under 34 CFR 668.23(c).
(3) An institution that timely submits the Payment Data for a student in accordance with paragraph (a) of this section but does not timely submit to the Secretary, or have accepted by the Secretary, the Payment Data necessary to document the full amount of the award to which the student is entitled, may receive a payment or reduction in accountability in the full amount of that award, if—
(i) A program review demonstrates to the satisfaction of the Secretary that the student was eligible to receive an amount greater than that reported in the student's Payment Data timely submitted to, and accepted by the Secretary; and
(ii) The institution seeks an adjustment to reflect an underpayment for that award that is at least $100.
(4) In determining whether the institution qualifies for a payment or reduction in accountability, the Secretary takes into account any liabilities of the institution arising from that audit or program review or any other source. The Secretary collects those liabilities by offset in accordance with 34 CFR part 30.
20 U.S.C 1070c through 1070c-4, unless otherwise noted.
The Leveraging Educational Assistance Partnership (LEAP) Program assists States in providing grants and work-study assistance to eligible students who attend institutions of higher education and have substantial financial need. The work-study assistance is provided through campus-based community service work learning study programs, hereinafter referred to as community service-learning job programs.
(a)
(b)
The following regulations apply to the LEAP Program:
(a) The regulations in this part 692.
(b) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR 75.60-75.62 (Ineligibility of Certain Individuals to Receive Assistance).
(2) 34 CFR part 76 (State-Administered Programs).
(3) 34 CFR part 77 (Definitions That Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 80 (Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments).
(6) 34 CFR part 82 (New Restrictions on Lobbying).
(7) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)).
(8) 34 CFR part 86 (Drug and Alcohol Abuse Prevention).
(c) The Student Assistance General Provisions in 34 CFR part 668.
The following definitions apply to the regulations in this part:
(a) The definitions of the following terms under 34 CFR part 600:
Postsecondary vocational institution (§ 600.6).
Public or private nonprofit institution of higher education (§ 600.4).
Secretary (§ 600.2).
State (§ 600.2).
(b) The definitions of the following terms under 34 CFR part 668:
Academic year (§ 668.2).
Enrolled (§ 668.2).
HEA (§ 668.2).
Institution (§ 668.1(b)).
(c) The definitions of the following terms also apply to the LEAP Program:
(1) Coursework or other required activities, as determined by the institution that the student attends or by the State.
(2) The tuition and fees normally charged for full-time study by that institution.
(a)(1) The Secretary allots to each State participating in the LEAP program an amount which bears the same ratio to the Federal LEAP funds appropriated as the number of students in that State who are “deemed eligible” to participate in the State's LEAP program bears to the total number of students in all States who are “deemed eligible” to participate in the LEAP program, except that no State may receive less than it received in fiscal year 1979.
(2) If the Federal LEAP funds appropriated for a fiscal year are not sufficient to allot to each State the amount of Federal LEAP funds it received in fiscal year 1979, the Secretary allots to each State an amount which bears the same ratio to the amount of Federal LEAP funds appropriated as the amount of Federal LEAP funds that State received in fiscal year 1979 bears to the amount of Federal LEAP funds all States received in fiscal year 1979.
(b) For the purpose of paragraph (a)(1) of this section, the Secretary determines the number of students “deemed eligible” to participate in a State's LEAP Program by dividing the amount of that State's LEAP expenditures, including both its Federal allotment and the State-appropriated funds matching the allotment, by the average grant award per student of all participating States. The Secretary determines the “average grant award per student” by dividing the total number of student recipients for all States into the total amount of LEAP expenditures for all States, including both the Federal allotments and the State-appropriated funds matching those allotments. In making this determination, the Secretary uses the most current available data reported by each State.
A State may use the funds it receives under the LEAP Program only to make grants to students and to pay wages or salaries to students in community service-learning jobs.
(a) For each fiscal year that it wishes to participate, a State shall submit an application that contains information that shows that its Leveraging Educational Assistance Partnership Program meets the requirements of § 692.21.
(b)(1) Except as provided in paragraph (b)(2) of this section, the State must submit its application through
(2) If the Governor of the State so designates, and notifies the Secretary in writing, the State may submit its application under paragraph (a) of this section through an agency that did not administer its Leveraging Educational Assistance Partnership Program as of July 1, 1985.
To receive a payment under the LEAP Program for any fiscal year, a State must have a program that—
(a) Is administered by a single State agency;
(b) Provides assistance only to students who meet the eligibility requirements in § 692.40;
(c) Provides that assistance under this program to a full-time student will not be more than $5,000 for each academic year;
(d) Provides for the selection of students to receive assistance on the basis of substantial financial need determined annually by the State on the basis of standards that the State establishes and the Secretary approves;
See § 692.41.
(e) Provides that no student or parent shall be charged a fee that is payable to an organization other than the State for the purpose of collecting data to make a determination of financial need in accordance with paragraph (d) of this section;
(f) Provides that all public or private nonprofit institutions of higher education and all postsecondary vocational institutions in the State are eligible to participate unless that participation is in violation of—
(1) The constitution of the State; or
(2) A State statute that was enacted before October 1, 1978;
(g) Provides that, if a State awards grants to independent students or to students who are less-than-full-time students enrolled in an institution, a reasonable portion of the State's allocation must be awarded to those students;
(h) Provides that—
(1) The State will pay an amount for grants and work-study jobs under this part for each fiscal year that is not less than the payment to the State under this part for that fiscal year; and
(2) The amount that the State expends during a fiscal year for grants and work-study jobs under the LEAP Program represents an additional amount for grants and work-study jobs for students attending institutions over the amount expended by the State for those activities during the fiscal year two years prior to the fiscal year in which the State first received funds under the LEAP Program;
(i) Provides for State expenditures under the State program of an amount that is not less than—
(1) The average annual aggregate expenditures for the preceding three fiscal years; or
(2) The average annual expenditure per full-time equivalent student for those years;
(j) Provides that, to the extent practicable, the proportion of the funds awarded to independent students in the LEAP Program shall be the same proportion of funds awarded to independent students as is in the State program or programs of which the State's LEAP Program is a part; and
(k) Provides for reports to the Secretary that are necessary to carry out the Secretary's functions under the LEAP Program.
(a)(1) Each year, a State may use up to 20 percent of its allotment for a community service-learning job program that satisfies the conditions set forth in paragraph (b) of this section.
(2) A student who receives assistance under this section must receive compensation for work and not a grant.
(b)(1) The community service-learning job program must be administered by institutions in the State.
(2) Each student employed under the program must be employed in work in the public interest by an institution itself or by a Federal, State, or local public agency or a private nonprofit organization under an arrangement between the institution and the agency or organization.
(c) Each community service-learning job must—
(1) Provide community service as described in paragraph (d) of this section;
(2) Provide participating students community service-learning opportunities related to their educational or vocational programs or goals;
(3) Not result in the displacement of employed workers or impair existing contracts for services;
(4) Be governed by conditions of employment that are considered appropriate and reasonable, based on such factors as type of work performed, geographical region, and proficiency of the employee;
(5) Not involve the construction, operation, or maintenance of any part of a facility used or to be used for religious worship or sectarian instruction; and
(6) Not pay any wage to a student that is less than the current Federal minimum wage as mandated by section 6(a) of the Fair Labor Standards Act of 1938.
(d) For the purpose of paragraph (c)(1) of this section, “community service” means direct service, planning, or applied research that is—
(1) Identified by an institution through formal or informal consultation with local nonprofit, governmental, and community-based organizations; and
(2) Designed to improve the quality of life for residents of the community served, particularly low-income residents, in such fields as health care, child care, education, literacy training, welfare, social services, public safety, crime prevention and control, transportation, recreation, housing and neighborhood improvement, rural development, and community improvement.
(e) For the purpose of paragraph (d)(2) of this section, “low-income residents” means—
(1) Residents whose taxable family income for the year before the year in which they are scheduled to receive assistance under the LEAP Program did not exceed 150 percent of the amount equal to the poverty level determined by using criteria of poverty established by the United States Census Bureau; or
(2) Residents who are considered low-income residents by the State.
To be eligible for assistance, a student must—
(a) Meet the relevant eligibility requirements contained in 34 CFR 668.32; and
(b) Have substantial financial need as determined annually in accordance with the State's criteria approved by the Secretary.
(a) A State determines whether a student has substantial financial need on the basis of criteria it establishes that are approved by the Secretary. A State may define substantial financial need in terms of family income, expected family contribution, and relative need as measured by the difference between the student's cost of attendance and the resources available to meet that cost. To determine substantial need, the State may use—
(1) A system for determining a student's financial need under part F of title IV of the HEA;
(2) The State's own needs analysis system if approved by the Secretary; or
(3) A combination of these systems, if approved by the Secretary.
(b) The Secretary generally approves a need-analysis system under paragraph (a) (2) or (3) of this section only if the need-analysis system applies the term “independent student” as defined under section 480(d) of the HEA. However, for good cause shown, the Secretary may approve, on a case-by-case basis, a State's need analysis system that uses a definition for “independent student” that varies from that term as defined in section 480(d) of the HEA.
The Special Leveraging Educational Assistance Partnership (SLEAP) Program assists States in providing grants, scholarships, and community service work-study assistance to eligible students who attend institutions of higher education and demonstrate financial need.
The regulations listed in § 692.3 also apply to the SLEAP Program.
The definitions listed in § 692.4 apply to the SLEAP Program.
To receive SLEAP Program funds for any fiscal year, a State must—
(a) Participate in the LEAP Program;
(b) Meet the requirements in § 692.60; and
(c) Have a program that satisfies the requirements in § 692.21(a), (b), (d), (e), (f), (g), (j), and (k).
To receive assistance under the SLEAP Program, a student must meet the eligibility requirements contained in § 692.40.
To receive an allotment under the SLEAP Program, a State must—
(a) Submit an application in accordance with the provisions in § 692.20;
(b) Identify the activities in § 692.71 for which it plans to use the SLEAP Federal and non-Federal funds;
(c) Ensure that the non-Federal funds used as matching funds represent dollars that are in excess of the total dollars that a State spent for need-based grants, scholarships, and work-study assistance for fiscal year 1999, including the State funds reported as part of its LEAP Program;
(d) Provide an assurance that for the fiscal year prior to the fiscal year for which the State is requesting Federal funds, the amount the State expended from non-Federal sources per student, or the aggregate amount the State expended, for all the authorized activities in § 692.71 will be no less than the amount the State expended from non-Federal sources per student, or in the aggregate, for those activities for the
(e) Ensure that the Federal share will not exceed one-third of the total funds expended under the SLEAP Program.
For each fiscal year, the Secretary allots to each eligible State that applies for SLEAP funds an amount in accordance with the provisions in § 692.10.
A State may use the funds it receives under the SLEAP Program for one or more of the following activities:
(a) Supplement LEAP grant awards to eligible students who demonstrate financial need by—
(1) Increasing the LEAP grant award amounts for students; or
(2) Increasing the number of students receiving LEAP grant awards.
(b) Supplement LEAP community service work-study awards to eligible students who demonstrate financial need by—
(1) Increasing the LEAP community service work-study award amounts for students; or
(2) Increasing the number of students receiving LEAP community service work-study awards.
(c) Award scholarships to eligible students who demonstrate financial need and who—
(1) Demonstrate merit or academic achievement; or
(2) Wish to enter a program of study leading to a career in—
(i) Information technology;
(ii) Mathematics, computer science, or engineering;
(iii) Teaching; or
(iv) Other fields determined by the State to be critical to the State's workforce needs.
A State may not use any of the funds it receives under the SLEAP Program to pay any administrative costs.
When administering its community service work-study program, a State must follow the provisions in § 692.30, other than the provisions of paragraph (a)(1) of that section.
20 U.S.C. 1070a-21 through 1070a-27, unless otherwise noted.
Under the National Early Intervention Scholarship and Partnership (NEISP) Program, the Secretary provides grants to States to—
(a) Encourage the States to provide or maintain a guaranteed amount of financial assistance necessary to permit eligible low-income students who obtain high school diplomas or the equivalent to attend an institution of higher education; and
(b) Provide financial incentives to enable States, in cooperation with local educational agencies, institutions of higher education, community organizations, and businesses, to provide—
(1) Additional counseling, mentoring, academic support, outreach, and supportive services to preschool, elementary, middle, and secondary school students who are at risk of dropping out of school; and
(2) Information to students and their parents about the advantages of obtaining a postsecondary education and their college financing options.
(a) States that meet the requirements of §§ 693.10, 693.11, 693.12, 693.13, 693.20 (formula grant program), 693.21, and 693.22 (discretionary grant program) are eligible to receive grants under this program.
(b) Under the early intervention component, students who meet the requirements of § 693.30 are eligible to participate in the State-administered programs under this part.
(c) Under the scholarship component, students who meet the requirements of § 693.40 are eligible to receive scholarships from States under this program.
Under the NEISP Program, a State may use its allotment under § 693.21 or § 693.22 to—
(a) Provide a variety of early intervention services such as comprehensive mentoring, counseling, outreach, and other supportive services to eligible students enrolled in preschool through grade 12, including prefreshman summer programs; and
(b) Award scholarships to eligible low-income students for attendance at any institution of higher education participating in the Federal Pell Grant Program.
The following regulations apply to the NEISP Program:
(a) The regulations in this part 693.
(b) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) If the amount appropriated for the program is less than $50,000,000, 34 CFR part 75 (Direct Grant Programs).
(2) If the amount appropriated for the program is $50,000,000 or more, 34 CFR part 76 (State-Administered Programs).
(3) 34 CFR part 77 (Definitions That Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 80 (Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments).
(6) 34 CFR part 82 (New Restrictions on Lobbying).
(7) 34 CFR part 85 (Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants).
(8) 34 CFR part 86 (Drug-Free Schools and Campuses).
(c) Institutional Eligibility Under the Higher Education Act of 1965, as Amended in 34 CFR part 600.
(d) The Student Assistance General Provisions in 34 CFR part 668.
(a)
(b)
Award year
Institution of higher education
Recognized equivalent of a high school diploma
(c)
Academic year
(d)
(1) A student neither of whose parents completed a baccalaureate degree; or
(2) A student who regularly resides with and receives support from only one parent who did not complete a baccalaureate degree.
(1)(i) Who was not born in the United States;
(ii) Whose native language is other than English;
(iii) Who comes from an environment in which a language other than English is most relied on for communication; or
(iv) Who is an American Indian or Alaskan Native student and comes from an environment in which a language other than English has had a significant impact on his or her level of proficiency in English; and
(2) Who, as a result of the circumstances described in paragraph (1) of this definition, is unable to learn successfully in classrooms in which instruction is in English because he or she cannot adequately understand, speak, read, or write English.
(1) To be counted as attending an institution receiving Federal funds under chapter 1 of the Elementary and Secondary Education Act of 1965;
(2) To receive free or reduced-price meals under the National School Lunch Act; or
(3) To receive assistance under the Aid to Families with Dependent Children Act.
(a) To obtain a grant, a State shall submit to the Secretary for review and approval an initial plan and annual application for carrying out the activities under the NEISP Program.
(b) The Secretary approves a State plan that—
(1) By direction of the State's Governor, designates as the State agency for administering the program under this part, either—
(i) The State agency that administers the State Student Incentive Grant Program under title IV, part A, subpart 4 of the HEA;
(ii) The State educational agency; or
(iii) Another appropriate State agency approved by the Secretary;
(2) Provides that the State program under this part shall be known as the “[insert name of the State] National Early Intervention Scholarship and Partnership Program” which may be referred to as the “[State name] NEISP Program,”;
(3) Demonstrates to the satisfaction of the Secretary that the State will provide for the conduct under the State's NEISP Program of both—
(i) An early intervention component meeting the requirements under § 693.11 as evaluated by the Secretary under the criteria in § 693.20 (formula grant program) and § 693.22 (discretionary grant program); and
(ii) A scholarship component meeting the requirements under § 693.12;
(4) Describes the administrative plan for implementing the State's NEISP Program, including those functions that will be carried out by public and private organizations; and
(5) Provides assurances that the State will—
(i) Ensure that the funds provided under this part supplement and do not supplant funds expended for State and local early intervention programs and State need- and non-need-based student
(ii) Expend, from State, local, or private funds or other acceptable funding methods, not less than one-half of the cost of the program under this part;
(iii) Specify the methods by which such share of the costs will be paid;
(iv) Not use less than 25 percent or more than 50 percent of its total NEISP Program funds for the early intervention component, unless the State can satisfactorily demonstrate in its plan submitted to the Secretary that the State has additional means to provide scholarships to students, in accordance with the waiver provision in § 693.13(b);
(v) Expend all of the NEISP Program funds under the scholarship component only to provide scholarships to eligible students; and
(vi) Conduct and submit to the Secretary a biennial evaluation of the early intervention program assisted under this part in accordance with the requirements in § 693.52.
(c) With the exception of its initial year of participation when each State also must submit the application required under § 693.13 at the same time as the State plan under paragraph (b) of this section, the State shall submit annually an application to participate in the NEISP Program in accordance with the requirements in § 693.13.
(a) A State shall demonstrate to the Secretary in its plan submitted according to § 693.10(b) how its early intervention component provides services designed to meet the unique needs of the State's eligible students enrolled in preschool through grade 12. These services may include, but are not limited to, the following kinds of activities:
(1) A continuing system of mentoring and advising that—
(i) Is coordinated with the Federal and State community service initiatives; and
(ii) Includes such support services as—
(A) Instruction in reading, writing, study skills, mathematics, and other subjects necessary for success in education beyond secondary school;
(B) After-school and summer tutoring;
(C) Assistance in obtaining summer jobs;
(D) Career mentoring;
(E) Academic counseling and assistance in secondary school course selection;
(F) Financial aid counseling that provides information on the opportunities for postsecondary student financial assistance;
(G) Instruction designed to prepare students participating in the program for careers in which students from disadvantaged backgrounds are particularly underrepresented, as determined by the State; and
(H) Programs and activities specifically designed for students with limited proficiency in English.
(2) Activities designed to ensure high school completion and college enrollment of at-risk students by providing, in addition to the activities specified under paragraph (a) of this section, the following:
(i) Assessment to identify at-risk students.
(ii) Skills assessment.
(iii) Activities to encourage volunteer and parent involvement in the activities planned under this section.
(iv) Programs that involve the participation of former or current scholarship recipients as mentors or peer counselors.
(v) Personal and family counseling, including home visits.
(vi) Staff development to provide the services under this part.
(3) Activities that encourage students to complete secondary school and pursue postsecondary education by requiring each student to enter into an agreement under which the State will provide postsecondary tuition assistance to a student, during a period of time to be established by the State, if
(i) Completing the prescribed set of secondary courses required for an individual to be eligible for a Presidential Access Scholarship under chapter 3, subpart 2, part A, title IV of the HEA; and
(ii) Maintaining satisfactory academic progress according to the requirements in 34 CFR 668.7 in a postsecondary education program.
(4) Prefreshman summer programs that—
(i) Are at institutions of higher education that also have academic support services for disadvantaged students through projects regulated by 34 CFR part 646, Student Support Services, or through comparable projects as certified by the SEA or other appropriate State agency funded by the State or other sources;
(ii) Assure the participation of students who qualify as disadvantaged students or who are eligible for comparable programs funded by the State and certified under paragraph (a)(4)(i) of this section;
(iii) Provide summer services, including—
(A) Instruction in remedial, developmental, or supportive courses;
(B) Counseling, tutoring, or orientation; and
(C) Grant aid to students to cover prefreshman summer costs for books, supplies, living costs, and personal expenses; and
(iv) Assure that participating students will receive financial aid during each academic year they are enrolled at the participating institution after the prefreshman summer.
(5) Other activities as the State proposes and the Secretary approves as supportive of the purposes of the NEISP Program.
(b) The State shall indicate to the Secretary which of the following permissible service providers will conduct the early intervention component activities:
(1) Community-based organizations.
(2) Elementary or secondary schools.
(3) Institutions of higher education.
(4) Public and private agencies.
(5) Nonprofit and philanthropic organizations.
(6) Businesses.
(7) Institutions and agencies sponsoring programs authorized under the State Student Incentive Grant Program, subpart 4, part A, title IV of the HEA.
(8) Institutions and agencies sponsoring programs authorized under the Federal TRIO Programs, chapter 1, subpart 2, part A, title IV of the HEA.
(9) Religious organizations.
(10) Other organizations proposed by the State that are subsequently deemed appropriate by the Secretary.
(c) The State shall describe how the service providers listed in paragraph (b) of this section will administer the early intervention component activities.
(d) The State shall propose for review by and approval of the Secretary the methods by which it will target its early intervention services on priority students.
A State shall provide for a scholarship component that—
(a) As described in the State's plan approved by the Secretary under 693.10, is closely coordinated with other Federal, State, local, and private scholarship programs within the State;
(b) Awards scholarships only to students who meet the eligibility requirements in 693.40;
(c) Places a priority on awarding scholarships to students who will receive Federal Pell Grant awards for the academic year in which the award is being made under this part by—
(1) Selecting those eligible students who will receive Federal Pell Grants and who—
(i) Have the lowest expected family contributions as calculated under part F of title IV of the HEA; or
(ii) Are the neediest students as prioritized under the State's criteria for low-income students if the State's criteria are approved by the Secretary; and
(2) If the State has NEISP Program scholarship funds remaining after making NEISP awards to all of the eligible Federal Pell Grant recipients, awarding the remaining NEISP Program scholarship funds to those eligible students who will not receive Federal Pell Grant awards and who—
(i) Have the lowest expected family contributions; or
(ii) Are the neediest students as prioritized under the State's criteria for low-income students if the State's criteria are approved by the Secretary;
(d) Awards continuation scholarships in successive award years to each student who received an initial scholarship and who continues to meet the student eligibility requirements under § 693.40;
(e) Establishes the maximum amount of a scholarship that each eligible student is to receive and ensures that no scholarship is less than the lesser of—
(1) 75 percent of the average cost of attendance, as determined under section 472, part F of the HEA, for an in-State student in a 4-year program of instruction at public institutions of higher education in the State; or
(2) The maximum Federal Pell Grant award funded for that fiscal year;
(f) Ensures that, for each recipient of a scholarship under this part who is eligible for and receiving other postsecondary student financial assistance, a Federal Pell Grant be awarded first, other public and private grant and scholarship assistance be awarded second, a scholarship under this part be awarded third, and then other financial assistance be awarded;
(g) Ensures that no scholarship awarded under this part, combined with other title IV, HEA financial assistance and any other grant or scholarship assistance exceeds the student's total cost of attendance, as determined under section 472, part F of the HEA;
(h) Expends all NEISP Program funds under the scholarship component, as determined according to § 693.10(b)(5)(iv), on scholarships to students;
(i) Notifies recipients of scholarships under this part that they are to be known as “[insert name of the State] National Partnership Scholars”; and
(j) Describes to the satisfaction of the Secretary the procedures the State will use to award scholarships to eligible students in the event that the State receives reduced or no Federal funding under the NEISP Program during any fiscal year.
(a) Each State desiring to participate in the program under this part shall submit an application annually through the State agency designated to administer the NEISP Program under § 693.10(b) that contains information required by the Secretary to demonstrate that the State meets its fund-matching assurances provided for in its plan, including—
(1) The total amount of non-Federal funds, listed by each source, that the State expects to expend during the next award year that will total one-half or more of the cost of the NEISP Program such as—
(i) The amount of the scholarships paid to students from State, local, or private funds under the NEISP Program;
(ii) The amount of tuition, fees, room, or board waived or reduced for recipients of grants under the NEISP Program; and
(iii) The amount expended on documented, targeted, long-term mentoring and counseling provided by volunteers or paid staff of nonschool organizations, including businesses, religious organizations, community groups, postsecondary educational institutions, nonprofit or philanthropic organizations, and other organizations proposed by the State and approved by the Secretary;
(2) A description of the specific methods by which the State's share of the costs under the NEISP Program will be paid;
(3) The percentage of the State's Federal allotment that it plans to expend for the early intervention component of its NEISP Program and, if the State requests a waiver from the Secretary
(4) The documentation that assures the Secretary that the amount of funds provided in paragraph (a)(1) of this section will supplement and not supplant funds expended for State and local early intervention programs and State need- and non-need-based student financial grant and scholarship assistance expended during the fiscal year 2 years prior to the fiscal year in which the State first received funds under this program; and
(5)(i) Proposed changes to the initial State plan that was approved by the Secretary, according to § 693.10(b), for the review and approval of the Secretary; or
(ii) If no changes to its initial plan are proposed, an assurance that the State will continue to operate its NEISP Program according to the existing State plan approved by the Secretary under § 693.10(b).
(b) The Secretary waives the requirement in § 693.10(b)(5)(iv) and allows the State to exceed the 50 percent limit on expenditure of its Federal allotment for the early intervention component if the State can demonstrate to the satisfaction of the Secretary that the State has another adequate means to provide scholarships to eligible students under the NEISP Program.
The Secretary uses the following criteria to determine whether a State's early intervention component proposed under § 693.10(b)(3)(i) meets the requirements of § 693.11:
(a)
(2) The Secretary looks for information that shows—
(i) High quality in the design of the component;
(ii) An effective plan of management that ensures proper and efficient administration of the component;
(iii) A clear description of how the State's proposed early intervention component relates to the purpose of the program;
(iv) The way that the State plans to use its resources and personnel to achieve the objectives of the component;
(v) A clear description of the methods that the State will use to target early intervention services to priority students. The State must base the proposed methods on the latest available State data. The State may target services on priority students by——
(A) Elementary and secondary schools with high concentrations of priority students within the State;
(B) Appropriate identifiable geographic areas such as counties or school districts (including both public and private schools) with high concentrations of priority students within the State; or
(C) Other methods proposed by a State and approved by the Secretary;
(vi) A clear description of the comprehensive long-term mentoring and advising that the State plans to provide to eligible students; and
(vii) The extent to which other State grant funds are available to eligible NEISP students for postsecondary educational scholarships if the Federal scholarship component of the program is unfunded or reduced.
(b)
(2) The Secretary looks for information that shows—
(i) The qualifications of the director of the early intervention component;
(ii) The qualifications of each of the other key personnel to be used in the component; and
(iii) The amount of time each person referred to in paragraphs (b)(2)(i) and (ii) of this section will spend working in the activities under this component.
(3) To determine the qualifications of the key personnel, the Secretary considers evidence of past experience and training in fields related to the objectives of the early intervention component as well as other information the State provides.
(c)
(2) The Secretary looks for information that shows—
(i) The budget for the project is adequate to support the early intervention component activities; and
(ii) Costs are reasonable in relation to the activities under the component.
(3) The Secretary reviews the State's budget for the early intervention component to verify that not more than 50 percent of the State's allotment is projected to be spent on its early intervention component unless the State requests and is granted a waiver under § 693.13(b).
(d)
(2) The Secretary looks for information that shows—
(i) The facilities that the State plans to use are adequate; and
(ii) The equipment and supplies that the State plans to use are adequate.
(e)
(2) The Secretary looks for information that shows—
(i) The number and percentage of students who are eligible to be served by the State's early intervention component, including students who are priority students and students who are disadvantaged;
(ii) The extent to which the State documents its need for the services and activities that the State proposes to provide under its early intervention component;
(iii) The ratio of secondary school counselors to all students and to early intervention eligible students, if the data is available;
(iv) For each of the 3 preceding years, if available, the estimated dropout rates for the State, including the dropout rate for all students and for students eligible for the early intervention component as proposed by the State; and
(v) For each of the 3 preceding years, if available, the estimated number and percentage of students in the State who enrolled in postsecondary institutions for—
(A) All students who were eligible to enroll; and
(B) Students who would have been eligible for the State's proposed early intervention component.
(f)
(2) The Secretary looks for information that shows the extent to which the State's early intervention component is likely to—
(i) Enable the participants to develop academic skills, such as reading, writing, mathematics, and study skills, that are essential for postsecondary education;
(ii) Improve academic skills and motivate the participants to complete a secondary educational program and subsequently gain admission to postsecondary education institutions; and
(iii) Increase the secondary and postsecondary readmission rates of those participants who have not completed secondary or postsecondary education.
(3) The Secretary also looks for information that shows how comprehensively the State's proposed early intervention component—
(i) Identifies and selects eligible participants;
(ii) Diagnoses each participant's need for academic support in order to successfully pursue a program of postsecondary education;
(iii) Develops a plan of program support to improve each participant's skills; and
(iv) Provides the services and activities listed in § 693.11(a) that relate to the goals of the NEISP Program.
(g)
(2) The Secretary looks for information that shows—
(i) The extent to which the State has received and has included in its plan written commitments by organizations that will provide early intervention services under § 693.11(b); and
(ii) The existence of a plan to inform the residents of the State of the NEISP Program services and eligibility criteria.
(h)
(2) The Secretary looks for information that shows—
(i) The extent to which the State has investigated early intervention program activity and included in its plan the number and types of currently operating public and private early intervention programs within the State;
(ii) The extent to which the State's proposed plan will supplement existing Federal, State, local, and private early intervention programs within the State, such as the Federal Head Start, Chapter 1 Program in Local Educational Agencies, and TRIO programs; and
(iii) The written plans and commitments submitted to the State by other early intervention program providers that the State plans to use as either early intervention service providers under § 693.11(b) or as support organizations for those service providers.
(i)
(2) The Secretary looks for information that shows—
(i) The quality of the design of the component;
(ii) The extent that the methods of evaluation are appropriate for the program and the extent they are objective and produce useful data that are quantifiable;
(iii) The State's commitment to design an evaluation report to measure objectively performance against, at a minimum, the following standards:
(A) The effectiveness of the State's program in meeting the purposes of the program.
(B) The effect of the program on the student recipients being served by the program.
(C) The barriers to the effectiveness of the program and recommendations for changes or improvements to the program.
(D) The cost-effectiveness of the program.
(E) The extent to which the student recipients comply with the requirements of the program; and
(iv) Any other pertinent program measurements concerning the early intervention component that the State believes would be useful to the Secretary, which may be displayed through analytical charts, tables, and graphs.
(a) If the amount appropriated for the program under this part for a fiscal year is $50,000,000 or more, the Secretary allots to each State that has submitted an approved plan under § 693.10 and an approved application under § 693.13, an amount that bears the same ratio to the total appropriation as the amount allocated to the LEAs in the State under 34 CFR part 200 bears to the total amount allocated to all LEAs in all States using the most recently available data.
(b) If the amount appropriated for the program under this part for a fiscal
(c) From the allotment calculated in this section, the Secretary disburses to a State an amount equal to not more than one-half of the total amount of funds from all sources the State projects that it will expend on its NEISP Program for a fiscal year as reported on its annual application under § 693.13(a).
(d) A State may expend from its Federal allotment no more than one-half of the total amount of funds the State expends under its NEISP Program for that fiscal year.
(a) The Secretary allots funds to States under this program on a competitive basis if the program appropriation for a fiscal year is less than $50,000,000.
(b) The Secretary conducts a grant competition for the States by means of a notice published in the
(c)(1) The Secretary uses the selection criteria in paragraph (d) of this section to evaluate applications for grants under this program.
(2) The maximum score, not including prior grant recipient priority points in paragraph (d)(12) of this section, for all of these criteria is 140 points.
(3) The maximum score for each criterion is indicated in parentheses in paragraph (d) of this section.
(4) In the final selection of similarly rated applications, the Secretary considers the extent to which a State provides—
(i) A comprehensive State-wide early intervention and postsecondary educational scholarship program;
(ii) Eligible students with comprehensive long-term mentoring and advising; and
(iii) Eligible students with State grant funds for their postsecondary education as compared to the other States who apply for grant funds.
(d)(1)
(i) The number and percentage of students who are eligible to be served by the State's early intervention component, including students who are priority students and students who are disadvantaged;
(ii) The extent to which the State documents its need for the services and activities that the State proposes to provide under its early intervention component;
(iii) The ratio of secondary school counselors to all students and to early intervention eligible students, if the data is available;
(iv) For each of the three preceding years, if available, the estimated dropout rates for the State, including the dropout rate for all students and for students eligible for the early intervention component as proposed by the State; and
(v) For each of the three preceding years, if available, the estimated number and percentage of students in the State who enrolled in postsecondary institutions for—
(A) All students who were eligible to enroll; and
(B) Students who would have been eligible for the State's proposed early intervention component; and
(vi) Describes the procedures the State will use to award postsecondary education scholarships to eligible students in the event that the State receives reduced or no Federal funding under the NEISP Program during any fiscal year.
(2)
(i) (3 points) The quality of the design of the component;
(ii) (3 points) An effective plan of management that ensures proper and efficient administration of the component;
(iii) (3 points) A clear description of how the State's proposed early intervention component relates to the purpose of the program;
(iv) (3 points) The way that the State plans to use its resources and personnel to achieve the objectives of the component;
(v) (3 points) A clear description of the methods that the State will use to target early intervention services to priority students. The State must base the proposed methods on the latest available State data. The State may target services on priority students by—
(A) Elementary and secondary schools with high concentrations of priority students within the State;
(B) Appropriate identifiable geographic areas such as counties or school districts (including both public and private schools) with high concentrations of priority students within the State; or
(C) Other methods proposed by a State and approved by the Secretary;
(vi) (7 points) A clear description of the comprehensive long-term mentoring and advising that the State plans to provide to eligible students; and
(vii) (8 points) The extent to which other State grant funds are available to eligible NEISP students for their postsecondary education if the Federal scholarship component of the program is unfunded or reduced.
(3)
(A) The qualifications of the director of the early intervention component;
(B) The qualifications of each of the other key personnel to be used in the component; and
(C) The amount of time each person referred to in paragraphs (d)(3)(i) (A) and (B) of this section will spend working in the activities under this component.
(ii) To determine the qualifications of the key personnel, the Secretary considers evidence of past experience and training in fields related to the objectives of the early intervention component as well as other information the State provides.
(4)
(i) The budget for the project is adequate to support the early intervention component activities; and
(ii) Costs are reasonable in relation to the activities under the component.
(5)
(i) The facilities that the State plans to use are adequate; and
(ii) The equipment and supplies that the State plans to use are adequate.
(6)
(i) Enable the participants to develop academic skills, such as reading, writing, mathematics, and study skills, that are essential for postsecondary education;
(ii) Improve academic skills and motivate the participants to complete a secondary educational program and subsequently gain admission to postsecondary education institutions;
(iii) Increase the secondary and postsecondary readmission rates of those participants who have not completed secondary or postsecondary education;
(iv) Identify and select eligible participants;
(v) Diagnose each participant's need for academic support in order to successfully pursue a program of postsecondary education; and
(vi) Develop a plan of program support to improve each participant's skills.
(7)
(i) The extent to which the State has received and has included in its plan written commitments by organizations that will provide early intervention services; and
(ii) The existence of a plan to inform the residents of the State of the NEISP Program services and eligibility criteria.
(8)
(i) The extent to which the State has investigated early intervention program activity and included in its plan the number and types of currently operating public and private early intervention programs within the State;
(ii) The extent to which the State's proposed plan will supplement existing Federal, State, local, and private early intervention programs within the State, such as the Federal Head Start, Chapter 1 Program in Local Educational Agencies, and TRIO programs; and
(iii) The written plans and commitments submitted to the State by other early intervention program providers that the State plans to use as either early intervention service providers or as support organizations for those service providers.
(9)
(10)
(i) The quality of the design of the component;
(ii) The extent that the methods of evaluation are appropriate for the program and the extent they are objective and produce useful data that are quantifiable; and
(iii) The State's commitment to design an evaluation report to measure objectively performance against, at a minimum, the following standards:
(A) The effectiveness of the State's program in meeting the purposes of the program.
(B) The effect of the program on the student recipients being served by the program.
(C) The barriers to the effectiveness of the program and recommendations for changes or improvements to the program.
(D) The cost-effectiveness of the program.
(E) The extent to which the student recipients comply with the requirements of the program; and
(iv) Any other pertinent program measurements concerning the early intervention component that the State believes would be useful to the Secretary, which may be displayed through analytical charts, tables, and graphs.
(11)
(i) To determine the number of priority points to be awarded each eligible State applicant, the Secretary considers the State's prior experience of program participation in accordance with paragraphs (d)(11) (ii) and (iii) of this section.
(ii) The Secretary may add from one to twenty points to the point score obtained on the basis of the selection criteria, based on the State applicant's success in meeting the administrative requirements and programmatic objectives of paragraph (d)(11)(iii) of this section.
(iii) The Secretary—based on information contained in one or more of the following: Performance reports, audit reports, site visit reports, program evaluation reports, the previously funded application, the negotiated program plan or plans, previous State matching funds, and the application under consideration—considers information that shows—
(A) (5 points) The extent to which the State's program has served the number of student participants it was funded to serve;
(B) (5 points) The extent to which the State's program has achieved the goals and objectives as stated in the previously funded application or negotiated program plan;
(C) (5 points) The extent to which the State has met the administrative requirements—including recordkeeping, reporting, and financial accountability—under the terms of the previously funded award; and
(D) (5 points) The extent to which the State has provided funds to match its Federal allotment.
(e) The Secretary disburses to each State selected in the competition conducted under paragraph (b) of this section an amount equal to not more than one-half of the total amount of funds from all sources the State projects that it will expend on its NEISP Program for a fiscal year as reported on its annual application under § 693.13(a)(1).
The State agency administering the NEISP Program, as approved by the Secretary under § 693.10(b)(1), shall select students in preschool through grade 12 to participate in the State's early intervention component, each of whom—
(a)(1) Is a citizen or a national of the United States;
(2) Is a permanent resident of the United States;
(3) Provides evidence from the Immigration and Naturalization Service that he or she is in the United States for other than a temporary purpose with the intention of becoming a citizen or permanent resident; or
(4) Is a permanent resident of the Trust Territory of the Pacific Islands;
(b) Is, at the time of initial selection, a priority student, an at-risk student, a disadvantaged student, or a student with a limited proficiency in English;
(c) Has a need for academic support, as determined by the State, to pursue his or her education successfully;
(d) Resides within the State;
(e) Is not currently enrolled in a program of postsecondary education;
(f) Meets such other criteria as the State includes in its plan in order to meet the unique needs of the State and that are approved by the Secretary; and
(g) For an otherwise eligible student who is attending secondary school, is a student whom the State determines can reasonably be expected to meet the student eligibility requirements of 34 CFR 668.7 for Federal student financial assistance and such other requirements as necessary to qualify for State, local, or private student financial assistance,
To be eligible for a scholarship under the scholarship component of this program, a student must—
(a) Apply for the scholarship by following the application procedures and deadlines established by the State agency approved by the Secretary under § 693.10(b)(1) to administer the NEISP Program in the State in which the individual resides;
(b) Meet the relevant eligibility requirements contained in 34 CFR 668.7;
(c) Be less than 22 years old at the time his or her first scholarship is awarded;
(d) Have a high school diploma or a certificate of high school equivalence received on or after January 1, 1993;
(e) Be enrolled or accepted for enrollment in a program of instruction at an institution of higher education that is located within the State's boundaries, except that a State, at its option, may offer such a scholarship to a student who attends an eligible institution of higher education outside of the State;
(f) If a State includes academic milestones in a student agreement under § 693.11(a)(3) and requires the student to meet the milestones to be eligible for a scholarship, have met or exceeded the academic milestones to receive a scholarship; and
(g)(1) Have participated in the early intervention component of the program under this part;
(2) At the State's option, be a student whom the State documents as having successfully participated in a Federal Upward Bound Program funded under section 402C, chapter 1, subpart 2, part A of title IV of the HEA as determined by an administrator of the Federal Upward Bound program in which the student participated; or
(3) At the State's option, be a student whom the State determines as having successfully participated in an early intervention program comparable to the early intervention component of the program under this part.
A State may use its NEISP Program funds for the following allowable costs not specifically covered by 34 CFR parts 76 or 80 that are reasonably related to carrying out the early intervention component of the NEISP Program:
(a) In-service training of project staff.
(b) Transportation and meal costs for participants and staff for—
(1) Approved visits to postsecondary educational institutions in the area;
(2) Participation in “College Days” and “College Fair” activities; and
(3) Field trips to observe and meet with people who are employed in various career fields and who can act as role models for early intervention participants.
(c) Purchasing testing materials.
(d) Admission fees, transportation, and other costs necessary to participate in field trips, attend educational activities, visit museums, and attend other events that have as their purpose the intellectual, social, and cultural development of early intervention participants.
(e) Courses in English language instruction for participants with limited proficiency in English, if these classes are limited to early intervention component participants and if these classes are not otherwise available to those participants.
(f) For participants in an early intervention residential summer activity, room and board—computed on a weekly basis—not to exceed the weekly rate a host institution charges regularly enrolled students at the institution.
(g) Room and board for those people responsible for dormitory supervision
(h) Transportation costs of early intervention component participants for regularly scheduled component activities.
(i) Transportation, meals, and overnight accommodations for staff members if they are required to accompany participants in program activities such as field trips.
(j) Costs of remedial and special classes if—
(1) These classes are limited to early intervention component participants; and
(2) Identical instruction is not readily available through another Federal program or a State, local, or privately funded program.
A State may not use its NEISP Program funds for costs incurred for the early intervention component of the NEISP Program such as—
(a) Duplication of services that are available to participants through—
(1) State, local, or private sources not included in the State plan under § 693.11; or
(2) Other Federal programs, such as projects under the Federal TRIO programs;
(b) Research not directly related to the evaluation or improvement of the program;
(c) Purchase of any equipment, unless the State demonstrates to the Secretary's satisfaction that purchase is less expensive than renting or leasing;
(d) Meals for program staff except as provided in § 693.50.
(e) Clothing;
(f) Construction, renovation, or remodeling of any facilities; or
(g) Tuition, stipends, or any other form of student financial support for program staff.
(a) Each State receiving an allotment under this part shall prepare and submit to the Secretary every two years an evaluation of the early intervention component of its NEISP Program. The report must summarize and evaluate a State's activities under the program and the performance of the student participants. Each State's evaluation report design must include measures that permit the State to track all participating students progress throughout each student's participation in the program.
(b) The biennial evaluation report of the early intervention component of the program must include, but is not limited to—
(1) Quantifiable information on the extent to which the State's program is fulfilling the program objectives;
(2) The effect of the program on the student recipients being served by the program, including measurable outcomes such as improved academic performance, increased postsecondary education enrollment and retention, increased elementary and secondary school grade retention, reduced elementary and secondary school dropout rates, and reduced financial barriers to attendance at institutions of higher education;
(3) The barriers to the effectiveness of the program and recommendations for changes or improvements to the program;
(4) The cost-effectiveness of the program;
(5) The extent to which the student recipients comply with the requirements of the program;
(6) Key program information listed on an annual and biennial basis;
(7) Other pertinent program measurements concerning the early intervention component that the State believes would be useful to the Secretary, which may be displayed through analytical charts, tables, and graphs; and
(8) Any other information required by the Secretary in order to carry out the evaluation report function.
20 U.S.C. 1070a-21 to 1070a-28.
(a)
(1) $800; by
(2) The number of students the Partnership proposes to serve that year, as stated in the Partnership's plan.
(b)
A Partnership, or a State that chooses to use a cohort approach in its GEAR UP early intervention component, must, except as provided in § 694.4—
(a) Provide services to at least one entire grade level (cohort) of students (subject to § 694.3(b)) beginning not later than the 7th grade;
(b) Ensure that supplemental appropriate services are targeted to the students with the greatest needs; and
(c) Ensure that services are provided through the 12th grade to those students.
(a)
(1) That has a 7th grade; and
(2) In which at least 50 percent of the students are eligible for free or reduced-price lunch under the National School Lunch Act; or
(b)
(a)
(1) Are at the grade level of the students in the cohort; and
(2) Begin attending the participating school at which the cohort began to receive GEAR UP services.
(b)
(1) May continue to provide GEAR UP services to all students in the cohort; and
(2) Must continue to provide GEAR UP services to at least those students in the cohort that attend participating schools that enroll a substantial majority of the students in the cohort.
(a)
(b)
(1) Control the funds used to provide services under GEAR UP to those students;
(2) Hold title to materials, equipment, and property purchased with GEAR UP funds for GEAR UP program uses and purposes related to those students; and
(3) Administer those GEAR UP funds and property.
(a) GEAR UP services to students attending private schools must be provided—
(1) By employees of a public agency; or
(2) Through contract by the public agency with an individual, association, agency, or organization.
(b) In providing GEAR UP services to students attending private schools, the employee, individual, association, agency, or organization must be independent of the private school that the students attend, and of any religious organization affiliated with the school, and that employment or contract must be under the control and supervision of the public agency.
(c) Federal funds used to provide GEAR UP services to students attending private schools may not be commingled with non-Federal funds.
(a)
(1) State in its application the percentage of the cost of the GEAR UP project the Partnership will provide for each year from non-Federal funds, subject to the requirements in paragraph (b) of this section; and
(2) Comply with the matching percentage stated in its application for each year of the project period.
(b)
(2) A Partnership that has three or fewer institutions of higher education as members may provide less than 50 percent, but not less than 30 percent, of the total cost over the project period if it includes—
(i) A fiscal agent that is eligible to receive funds under Title V, or Part B of Title III, or section 316 or 317 of the HEA, or a local educational agency;
(ii) Only participating schools with a 7th grade in which at least 75 percent of the students are eligible for free or reduced-price lunch under the National School Lunch Act; and
(iii) Only local educational agencies in which at least 50 percent of the students enrolled are eligible for free or reduced-price lunch under the National School Lunch Act.
(3) The non-Federal share of the cost of a GEAR UP project may be provided in cash or in-kind.
Although any member of a Partnership may organize the project, a Partnership must designate as the fiscal agent for its project under GEAR UP—
(a) A local educational agency; or
(b) An institution of higher education that is not pervasively sectarian.
Notwithstanding 34 CFR 75.560-75.562 and 34 CFR 80.22, the maximum indirect cost rate that an agency of a State or local government receiving funds under GEAR UP may use to charge indirect costs to these funds is the lesser of—
(a) The rate established by the negotiated indirect cost agreement; or
(b) Eight percent of a modified total direct cost base.
(a)
(i) 75 percent of the average cost of attendance, as determined under section 472 of the HEA, for in-State students in 4-year programs of instruction at public institutions of higher education in the State; or
(ii) The maximum Federal Pell Grant award funded for the award year in which the scholarship will be awarded.
(2) If a student who is awarded a GEAR UP scholarship attends an institution on a less than full-time basis during any award year, the State or Partnership awarding the GEAR UP scholarship may reduce the scholarship amount, but in no case shall the percentage reduction in the scholarship be greater than the percentage reduction in tuition and fees charged to that student.
(b)
(1) Must award GEAR UP scholarships first to students who will receive, or are eligible to receive, a Federal Pell Grant during the award year in which the GEAR UP scholarship is being awarded and who are eligible for a GEAR UP scholarship under the eligibility requirements in section 404E(d) of the HEA; and
(2) May, if GEAR UP scholarship funds remain after awarding scholarships to students under paragraph (b)(1) of this section, award GEAR UP scholarships to other eligible students (who will not receive a Federal Pell Grant) after considering the need of those students for GEAR UP scholarships.
(c)
(d)
(e)
A GEAR UP Partnership that does not participate in the GEAR UP scholarship component may provide financial assistance for postsecondary education, either with funds under this chapter, (Under Chapter 2 of subpart 2 of Part A of Title IV of the HEA,) or with non-Federal funds used to comply with the matching requirement, to students who participate in the early intervention component of GEAR UP if—
(a) The financial assistance is directly related to, and in support of, other activities of the Partnership under the early intervention component of GEAR UP; and
(b) It complies with the requirements in § 694.10.
The Governor of a State must designate which State agency applies for, and administers, a State grant under GEAR UP.
(a) A State or Partnership must provide, in accordance with procedures the Secretary may specify, a 21st Century Scholar Certificate from the Secretary to each student participating in the early intervention component of its GEAR UP project.
(b) 21st Century Scholarship Certificates must be personalized and indicate the amount of Federal financial aid for college that a student may be eligible to receive.
Any State that receives a grant under this part and that served students under the NEISP program on October 6, 1998 must continue to provide services under this part to those students until they complete secondary school.
For any fiscal year, the Secretary may select one or more of the following priorities:
(a) Projects by Partnerships or States that serve a substantial number or percentage of students who reside, or attend a school, in an Empowerment Zone, including a Supplemental Empowerment Zone, or Enterprise Community designated by the U.S. Department of Housing and Urban Development or the U.S. Department of Agriculture.
(b) Partnerships that establish or maintain a financial assistance program that awards scholarships to students, either in accordance with section 404E of the HEA, or in accordance with § 694.11, to strengthen the early
20 U.S.C. 1213c(e).
(a) Under the Literacy Leader Fellowship Program, the Director of the National Institute for Literacy provides financial assistance to outstanding individuals who are pursuing careers in adult education, adult literacy or the adult components of family literacy, as defined in sections 1202(e)(3) (A), (B), and (C) of the Elementary and Secondary Education Act of 1965, as amended (20 USC 6362(e)(3) (A), (B), and (C)).
(b) Fellowships are awarded to these individuals for the purpose of carrying out short-term, innovative projects that contribute to the knowledge base of the adult education or adult or family literacy field.
(c) Fellowships are intended to benefit the fellow, the Institute, and the national literacy field by providing the fellow with the opportunity to interact with national leaders in the field and make contributions to federal policy initiatives that promote a fully literate adult population.
(a) Only individuals are eligible to be recipients of fellowships.
(b) To be eligible for a fellowship under this program, an individual must be—
(1) A citizen or national of the United States, or a permanent resident of the United States, or an individual who is in the United States for other than temporary purposes and intends to become a permanent resident;
(2) Eligible for Federal assistance under the terms of 34 CFR 75.60 and 75.61; and
(3) Either an adult or family literacy worker or an adult learner as defined in § 1105.5.
(c) An individual who has received a fellowship award in a prior year is not eligible for another award.
(d) Several individuals may apply jointly for one award, if each individual will contribute significantly to the proposed project and if the proposed project will develop leadership for each individual.
(a) Under the auspices of the Institute, and in accordance with the Fellowship Agreement, a Literacy Leader Fellow may use a fellowship awarded under this part to engage in research,
(b) a Literacy Leader Fellow may not use a fellowship awarded under this part for any of the following:
(1) Tuition and fees for continuing the education of the applicant where this is the sole or primary purpose of the project.
(2) Planning and implementing fundraisers
(3) General program operations and administration.
(4) Activities that otherwise do not meet the purposes of the Literacy Leader Fellowship program, as described in paragraph (a) of this section.
This program is governed by the regulations in this part and the following additional regulations:
34 CFR 74.36, Intangible property;
34 CFR 74.61, Termination
34 CFR 75.60, Individuals ineligible to receive assistance
34 CFR 75.61, Certification of eligibility
34 CFR part 85, Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants).
(a) The definitions in 34 CFR 77.1, except that the definitions of “Applicant”; “Application”, “Award”, and “Project” do not apply to this part.
(b) Other definitions. The following definitions also apply to this part:
The Director may, through a notice published in the
(a)
(b)
(c)
(d)
The Institute awards two categories of Literacy Leadership Fellowships:
(a) Literacy Worker Fellowships; and
(b) Adult Learner Fellowships.
An individual shall apply to the Director for a fellowship award in response to an application notice published by the Director in the
The Director does not evaluate an application if—
(a) The applicant is not eligible under § 1100.2;
(b) The applicant does not comply with all of the procedural rules that govern the submission of applications for Literacy Leader Fellowship funds;
(c) The application does not contain the information required by the Institute;
(d) The application proposes a project for which a fellow may not use the fellowship funds, as described in § 1100.3(b).
(e) The application is not submitted by the deadline stated in the application notice.
(a) The Director selects applications for fellowships on the basis of the selection criteria in § 1100.21 and any priorities that have been published in the
(b)(1) The Director may use experts from the literacy field to rank applications according to the selection criteria in § 1100.21, and then provide the top-ranked applications to the Institute's Advisory Board.
(2) The Institute's Advisory Board evaluates these applications based on the selection criteria in § 1100.21 and makes funding recommendations to the Director.
(3) The Director then determines the number of awards to be made in each fellowship category and the order in which applications will be selected for fellowships, based on the initial rank order, recommendations by the board, and any other information relevant to any of the selection criteria, applicable priorities, or the purposes of the Literacy Leader Fellowship Program, including whether the selection of an application would increase the diversity of fellowship projects under this program.
The Director uses the following criteria in evaluating each applicant for a fellowship:
(a)
(1) The proposed project deals with an issue of major concern to the literacy field.
(2) The design of the project is strong and feasible.
(3) The project addresses critical issues in an innovative way.
(4) The plan demonstrates a knowledge of similar programs and an intention, where appropriate, to coordinate with them.
(5) The applicant describes adequate support and resources for the project.
(6) The plan includes evaluation methods to determine the effectiveness of the project.
(7) The project results are likely to contribute to the knowledge base in literacy or adult education, and to federal policy initiatives in these or related areas.
(8) The project will enhance literacy or adult education practice.
(9) The project builds research capacity or improves practice within the field.
(b)
(1) The applicant has a strong background in the adult or family literacy field. (Include all relevant experience, which many include experience as a volunteer or an adult learner.)
(2) The applicant has expertise in the proposed area of the project.
(3) The applicant has demonstrated the ability to complete a quality project or has shown leadership in this area.
(4) The applicant provides letters of recommendation that show strong knowledge by others in the literacy field of the applicant's background and past work.
(c)
(1) The project significantly relates to the purposes and work of the Institute.
(2) The applicant proposes a minimum of four visits to the Institute for quarterly meetings (this may be adjusted according to the number of months to be served in the fellowship) and, if necessary, depending on the nature and scope of the proposed project, to spend an additional portion of the project time at the Institute.
(d)
(1) The applicant clearly specifies what information will be made available to the field and how this information will further the efforts of the field.
(2) The applicant describes how this information will be shared with the field (e.g., print, on-line, presentations, video, etc.).
(e)
(1) The budget will adequately support the project.
(2) The costs are clearly related to the objectives of the project.
(3) The budget is cost effective.
(4) The budget narrative clearly describes the budget and how costs are calculated.
The amount of the fellowship will not exceed $70,000, and shall consist of—
(a) A stipend, calculated on the basis of either—
(1) The fellow's current annual salary, prorated for the length of the fellowship salary reimbursement; or
(2) If a fellow has no current salary, the fellow's education and experience; and
(b) A subsistence allowance, materials allowance (covering costs of materials and supplies directly related to the completion of the project), and travel expenses (including expenses to attend quarterly meetings in Washington, DC) related to the fellowship and necessary to complete the scope of work outlined in the proposal, consistent with Title 5 U.S.C. chapter 57.
(a) Director will pay a fellowship award directly to the fellow or through the fellow's employer. The application should specify if the fellow wishes to be paid directly or through the fellow's employer.
(b) The Director considers the preferences of the fellow in determining whether to pay a fellowship award directly to the fellow or through the fellow's employer; however, the Director pays a fellowship award through the fellow's employer only if the employer enters into an agreement with the Director to comply the provisions of § 1100.25.
(a) If the Director pays fellowship award directly to the fellow after the Director determines the amount of a fellowship award, the fellowship recipient shall submit a payment schedule to the Director for approval. The Director advises the recipient of the approved schedule.
(b) If a fellow does not complete the fellowship, or if the Institute terminates the fellowship, the fellow shall return to the Director a prorated portion of the stipend and any unused subsistence and materials allowance and travel funds at the time and in the manner required by the Director.
(a) If the Director pays a fellowship award through the fellow's employer, the employer shall submit a payment schedule to the Director for approval.
(b) The employer shall pay the fellow the stipend, subsistence and materials allowance, and travel funds according to the payment schedule approved by the Director. If the fellow does not complete the fellowship, the fellow shall return to the employer a prorated portion of the stipend and any unused subsistence and materials allowance and travel funds. The employer shall return the funds to the Director at the time and in the manner required by the Director. The employer shall also return to the Director any portion of the stipend, subsistence and materials allowance and travel funds not yet paid by the employer to the fellow.
(a) A fellow is encouraged to carry out all, or a portion of, the fellowship
(b) Office space and logistics will be provided by the Institute when fellows are in residence at the Institute.
(c) the fellow may also be required to participate in meetings, conferences and other activities at the Departments of Education, Labor, or Health and Human Services, in Washington D.C., or in site visits to other locations, if deemed appropriate for the project being conducted.
(a) All fellowship activities are conducted under the direct or general oversight of the Institute. The Institute may arrange through written agreement for another Federal agency, or another public or private nonprofit agency or organization that is substantially involved in literacy research or services, to assume direct supervision of the fellowship activities.
(b) Fellows may be assigned a peer mentor to orient them to the Federal System and Institute procedures.
(a) The Institute awards fellowships for a period of at least three and not more than 12 months of full-time or part-time activity. Applicants proposing part-time projects must devote at least 60 percent of time to the project. The 60 percent requirement may be waived at the Director's discretion. An award may not exceed 12 months in duration. The actual period of the fellowship will be determined at the time of award based on proposed activities.
(b) In order to continue the fellowship to completion, the fellow must be making satisfactory progress as determined periodically by the Director.
(c) A fellowship may be terminated under the terms of 34 CFR 74.61.
(a) A fellow shall submit fellowship results to the Institute in formats suitable for wide dissemination to policymakers and the public. These formats should include, as appropriate to the topic of the fellowship and the intended audience, articles for academic journals, newspapers, and magazines.
(b) Each fellowship agreement will contain specific provisions for how, when, and in what format the fellow will report on results, and how and to whom the results will be disseminated.
(c) A fellow shall submit a final performance report to the Director no later than 90 days after the completion of the fellowship. The report must contain a description of the activities conducted by the fellow and a thorough analysis of the extent to which, in the opinion of the fellow, the objectives of the project have been achieved. In addition, the report must include a detailed discussion of how the activities performed and results achieved could be used to enhance literacy practice in the United States.
29 U.S.C. 794.
The purpose of this part is to effectuate section 119 of the Rehabilitation, Comprehensive Services, and Developmental Disabilities Amendments of 1978, which amended section 504 of the Rehabilitation Act of 1973 to prohibit discrimination on the basis of handicap in programs or activities conducted by Executive agencies or the United States Postal Service.
This part (§§ 1200.101—1200.170) applies to all programs or activities conducted by the agency, except for programs or activities conducted outside the United States that do not involve individuals with handicaps in the United States.
For purposes of this part, the term—
(1)
(i) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: Neurological; musculoskeletal; special sense organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genitourinary; hemic and lymphatic; skin; and endocrine; or
(ii) Any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities. The term “physical or mental impairment” includes, but is not limited to, such diseases and conditions as orthopedic, visual, speech, and hearing impairments, cerebral palsy, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, mental retardation, emotional illness, HIV disease (whether symptomatic or asymptomatic), and drug addiction and alcoholism.
(2)
(3)
(4)
(i) Has a physical or mental impairment that does not substantially limit major life activities but is treated by the agency as constituting such a limitation;
(ii) Has a physical or mental impairment that substantially limits major life activities only as a result of the attitudes of others toward such impairment; or
(iii) Has none of the impairments defined in paragraph (1) of this definition but is treated by the agency as having such an impairment.
(1) With respect to preschool, elementary, or secondary education services provided by the agency, an individual with handicaps who is a member of a class of persons otherwise entitled by statute, regulation, or agency policy to receive education services from the agency;
(2) With respect to any other agency program or activity under which a person is required to perform services or to achieve a level of accomplishment, an individual with handicaps who meets the essential eligibility requirements and who can achieve the purpose of the program or activity without modifications in the program or activity that the agency can demonstrate would result in a fundamental alteration in its nature;
(3) With respect to any other program or activity, an individual with handicaps who meets the essential eligibility requirements for participation in, or receipt of benefits from, that program or activity; and
(4)
(a) The agency shall, by November 28, 1994, evaluate its current policies and practices, and the effects thereof, that do not or may not meet the requirements of this part and, to the extent modification of any such policies and practices is required, the agency shall proceed to make the necessary modifications.
(b) The agency shall provide an opportunity to interested persons, including individuals with handicaps or organizations representing individuals with handicaps, to participate in the self-evaluation process by submitting comments (both oral and written).
(c) The agency shall, for at least three years following completion of the
(1) A description of areas examined and any problems identified; and
(2) A description of any modifications made.
The agency shall make available to employees, applicants, participants, beneficiaries, and other interested persons such information regarding the provisions of this part and its applicability to the programs or activities conducted by the agency, and make such information available to them in such manner as the head of the agency finds necessary to apprise such persons of the protections against discrimination assured them by section 504 and this part.
(a) No qualified individual with handicaps shall, on the basis of handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity conducted by the agency.
(b)(1) The agency, in providing any aid, benefit, or service, may not, directly or through contractual, licensing, or other arrangements, on the basis of handicap—
(i) Deny a qualified individual with handicaps the opportunity to participate in or benefit from the aid, benefit, or service;
(ii) Afford a qualified individual with handicaps an opportunity to participate in or benefit from the aid, benefit, or service that is not equal to that afforded others;
(iii) Provide a qualified individual with handicaps with an aid, benefit, or service that is not as effective in according equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others;
(iv) Provide different or separate aid, benefits, or services to individuals with handicaps or to any class of individuals with handicaps than is provided to others unless such action is necessary to provide qualified individuals with handicaps with aid, benefits, or services that are as effective as those provided to others;
(v) Deny a qualified individual with handicaps the opportunity to participate as a member of planning or advisory boards;
(vi) Otherwise limit a qualified individual with handicaps in the enjoyment of any right, privilege, advantage, or opportunity enjoyed by others receiving the aid, benefit, or service.
(2) The agency may not deny a qualified individual with handicaps the opportunity to participate in programs or activities that are no separate or different, despite the existence of permissibly separate or different programs or activities.
(3) The agency may not, directly or through contractual or other arrangements, utilize criteria or methods of administration the purpose or effect of which would—
(i) Subject qualified individuals with handicaps to discrimination on the basis of handicap; or
(ii) Defeat or substantially impair accomplishment of the objectives of a program or activity with respect to individuals with handicaps.
(4) The agency may not, in determining the site or location of a facility, make selections the purpose or effect of which would—
(i) Exclude individuals with handicaps from, deny them the benefits of, or otherwise subject them to discrimination under any program or activity conducted by the agency; or
(ii) Defeat or substantially impair the accomplishment of the objectives of a program or activity with respect to individuals with handicaps.
(5) The agency, in the selection of procurement contractors, may not use criteria that subject qualified individuals with handicaps to discrimination on the basis of handicap.
(6) The agency may not administer a licensing or certification program in a manner that subjects qualified individuals with handicaps to discrimination on the basis of handicap, nor may the agency establish requirements for the programs or activities of licensees or certified entities that subject qualified
(c) The exclusion of nonhandicapped persons from the benefits of a program limited by Federal statute or Executive order to individuals with handicaps or the exclusion of a specific class of individuals with handicaps from a program limited by Federal statute or Executive order to a different class of individuals with handicaps is not prohibited by this part.
(d) The agency shall administer programs and activities in the most integrated setting appropriate to the needs of qualified individuals with handicaps.
No qualified individual with handicaps shall, on the basis of handicap, be subjected to discrimination in employment under any program or activity conducted by the agency. The definitions, requirements, and procedures of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791), as established by the Equal Employment Opportunity Commission in 29 CFR part 1614, shall apply to employment in federally conducted programs or activities.
Except as otherwise provided in § 1200.150, no qualified individual with handicaps shall, because the agency's facilities are inaccessible to or unusable by individuals with handicaps, be denied the benefits of, be excluded from participation in, or otherwise be subjected to discrimination under any program or activity conducted by the agency.
(a)
(1) Necessarily require the agency to make each of its existing facilities accessible to and usable by individuals with handicaps;
(2) In the case of historic preservation programs, require the agency to take any action that would result in a substantial impairment of significant historic features of an historic property; or
(3) Require the agency to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. In those circumstances where agency personnel believe that the proposed action would fundamentally alter the program or activity or would result in undue financial and administrative burdens, the agency has the burden of proving that compliance with § 1200.150(a) would result in such alteration or burdens. The decision that compliance would result in such alteration or burdens must be made by the agency head or his or her designee after considering all agency resources available for use in the funding and operation of the conducted program or activity, and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action would result in such an alteration or such burdens, the agency shall take any other action that result in such an alteration or such burdens but would nevertheless ensure that individuals with handicaps receive the benefits and services of the program or activity.
(b)
(2)
(i) Using audio-visual materials and devices to depict those portions of an historic property that cannot otherwise be made accessible;
(ii) Assigning persons to guide individuals with handicaps into or through portions of historic properties that cannot otherwise be made accessible; or
(iii) Adopting other innovative methods.
(c)
(d)
(1) Identify physical obstacles in the agency's facilities that limit the accessibility of its programs or activities to individuals with handicaps;
(2) Describe in detail the methods that will be used to make the facilities accessible;
(3) Specify the schedule for taking the steps necessary to achieve compliance with this section and, if the time period of the transition plan is longer than one year, identify steps that will be taken during each year of the transition period; and
(4) Indicate the official responsible for implementation of the plan.
Each building or part of a building that is constructed or altered by, on behalf of, or for the use of the agency shall be designed, constructed, or altered so as to be readily accessible to and usable by individuals with handicaps. The definitions, requirements, and standards of the Architectural Barriers Act (42 U.S.C. 4151-4157), as established in 41 CFR 101-19.600 to 101-19.607, apply to buildings covered by this section.
(a) The agency shall take appropriate steps to ensure effective communication with applicants, participants, personnel of other Federal entities, and members of the public.
(1) The agency shall furnish appropriate auxiliary aids where necessary to afford an individual with handicaps an equal opportunity to participate in, and enjoy the benefits of, a program or activity conducted by the agency.
(i) In determining what type of auxiliary aid is necessary, the agency shall give primary consideration to the requests of the individual with handicaps.
(ii) The agency need not provide individually prescribed devices, readers for personal use or study, or other devices of a personal nature.
(2) Where the agency communicates with applicants and beneficiaries by telephone, telecommunication devices
(b) The agency shall ensure that interested persons, including persons with impaired vision or hearing, can obtain information as to the existence and location of accessible services, activities, and facilities.
(c) The agency shall provide signage at a primary entrance to each of its inaccessible facilities, directing users to a location at which they can obtain information about accessible facilities. The international symbol for accessibility shall be used at each primary entrance of an accessible facility.
(d) This section does not require the agency to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. In those circumstances where agency personnel believe that the proposed action would fundamentally alter the program or activity or would result in undue financial and administrative burdens, the agency has the burden of proving that compliance with § 1200.160 would result in such alteration or burdens. The decision that compliance would result in such alteration or burdens must be made by the agency head or his or her designee after considering all agency resources available for use in the funding and operation of the conducted program or activity and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action required to comply with this section would result in such an alteration or such burdens, the agency shall take any other action that would not result in such an alteration or such burdens but would nevertheless ensure that, to the maximum extent possible, individuals with handicaps receive the benefits and services of the program or activity.
(a) Except as provided in paragraph (b) of this section, this section applies to all allegations of discrimination on the basis of handicap in programs and activities conducted by the agency.
(b) The agency shall process complaints alleging violations of section 504 with respect to employment according to the procedures established by the Equal Employment Opportunity Commission in 29 CFR part 1614 pursuant to section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791).
(c) The Executive Director shall be responsible for coordinating implementation of this section. Complaints may be sent to the National Council on Disability, 800 Independence Avenue, SW., suite 814, Washington, DC 20591.
(d) The agency shall accept and investigate all complete complaints for which it has jurisdiction. All complete complaints must be filed within 180 days of the alleged act of discrimination. The agency may extend this time period for good cause.
(e) If the agency receives a complaint over which it does not have jurisdiction, it shall promptly notify the complainant and shall make reasonable efforts to refer the complaint to the appropriate Government entity.
(f) The agency shall notify the Architectural and Transportation Barriers Compliance Board upon receipt of any complaint alleging that a building or facility that is subject to the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), is not readily accessible to and usable by individuals with handicaps.
(g) Within 180 days of the receipt of a complete complaint for which it has jurisdiction, the agency shall notify the complainant of the results of the investigation in a letter containing—
(1) Findings of fact and conclusions of law;
(2) A description of a remedy for each violation found; and
(3) A notice of the right to appeal.
(h) Appeals of the findings of fact and conclusions of law or remedies must be filed by the complainant within 90 days of receipt from the agency of the letter required by § 1200.170(g). The agency may extend this time for good cause.
(i) Timely appeals shall be accepted and processed by the head of the agency.
(j) The head of the agency shall notify the complainant of the results of
(k) The time limits cited in paragraphs (g) and (j) of this section may be extended with the permission of the Assistant Attorney General.
(l) The agency may delegate its authority for conducting complaint investigations to other Federal agencies, except that the authority for making the final determination may not be delegated to another agency.
A list of CFR titles, subtitles, chapters, subchapters and parts and an alphabetical list of agencies publishing in the CFR are included in the CFR Index and Finding Aids volume to the Code of Federal Regulations which is published separately and revised annually.
Material Approved for Incorporation by Reference
Table of CFR Titles and Chapters
Alphabetical List of Agencies Appearing in the CFR
List of CFR Sections Affected
The Director of the Federal Register has approved under 5 U.S.C. 552(a) and 1 CFR Part 51 the incorporation by reference of the following publications. This list contains only those incorporations by reference effective as of the revision date of this volume. Incorporations by reference found within a regulation are effective upon the effective date of that regulation. For more information on incorporation by reference, see the preliminary pages of this volume.
All changes in this volume of the Code of Federal Regulations which were made by documents published in the
For the period before January 1, 2001, see the “List of CFR Sections Affected, 1949-1963, 1964-1972, 1973-1985, and 1986-2000,” published in 11 separate volumes.